Unless the context requires otherwise, references in this report to "Old Dominion," the "Company," "we," "us" and "our" refer to Old Dominion Freight Line, Inc.

Overview

We are a non-union less-than-truckload ("LTL") motor carrier providing regional and inter-regional service throughout the United States, including next-day and second-day service within each of our regions. We operate as one business segment and offer our products and services through four branded product groups, OD-Domestic, OD-Expedited, OD-Global and OD-Technology. In addition to our domestic LTL services, we offer service to and from all of North America, Central America, South America and the Far East. We also offer a broad range of expedited, logistical and warehousing services for both our domestic and global markets. Our services are complemented by our technological capabilities, which provide the means to improve the efficiency of our operations while empowering our customers to manage their shipping needs.

Our revenue is derived from providing freight transportation and supply-chain management services to our customers, whose demand for our services is generally tied to the overall health of the U.S. domestic economy. We compete with regional, inter-regional and national LTL carriers and, to a lesser extent, with truckload carriers, small package carriers, airfreight carriers and railroads. We provide consistent customer service from a single organization, offering our customers information and pricing from one point of contact. Our integrated structure allows us to offer our customers consistent and continuous service across all areas of our operations, and our diversified mix and scope of regional, inter-regional and value-added services enable us to provide customers a single source to meet their LTL shipping and supply-chain needs.

In analyzing the components of our revenue, we monitor changes and trends in the following key metrics:

• Revenue Per Hundredweight - This measurement reflects our pricing policies, which are influenced by competitive market conditions and our growth objectives. Generally, freight is rated by a class system, which is established by the National Motor Freight Traffic Association, Inc. Light, bulky freight typically has a higher class and is priced at higher revenue per hundredweight than dense, heavy freight. Changes in the class, packaging of the freight and length of haul of the shipment can also affect this average. Fuel surcharges, accessorial charges, revenue adjustments and revenue for undelivered freight are included in this measurement. Revenue for undelivered freight is deferred for financial statement purposes in accordance with our revenue recognition policy; however, we believe including this deferred revenue in our revenue per hundredweight measurements results in a better indicator of changes in our yields by matching total billed revenue with the corresponding shipments.

• Weight Per Shipment - Fluctuations in weight per shipment can indicate changes in the class, or mix, of freight we receive from our customers as well as changes in the number of units included in a shipment. Generally, increases in weight per shipment indicate higher demand for our customers' products and overall increased economic activity. Beginning in 2008, however, many shippers began consolidating shipments in an effort to reduce the impact of the high cost of diesel fuel on their transportation costs. In doing so, these shippers caused an increase in our weight per shipment by shipping the same volume of goods with fewer shipments.

• Average Length of Haul - We consider lengths of haul less than 500 miles to be regional traffic, lengths of haul between 500 miles and 1,000 miles to be inter-regional traffic, and lengths of haul in excess of 1,000 miles to be national traffic. By analyzing this metric, we can determine the success and growth potential of our service products in these markets.

Our primary revenue focus is to increase shipment and tonnage growth within our existing infrastructure, generally referred to as increasing density, thereby maximizing asset utilization and labor productivity. We measure density over many different functional areas of our operations including revenue per service center, linehaul load factor, pickup and delivery ("P&D") stops per hour, P&D shipments per hour, platform pounds handled per hour and platform shipments per hour. In addition to our focus on density, it is critical for us to obtain an appropriate yield on the shipments we handle. We manage our yields by focusing on individual account profitability. We believe yield management and improvements in density are key components in our ability to produce profitable growth.

Our primary cost elements are direct wages and benefits associated with the movement of freight; operating supplies and expenses; and depreciation of our equipment fleet and service center facilities. We gauge our overall success in managing these costs by monitoring our operating ratio, a measure of profitability calculated by dividing total operating expenses by revenue, which also allows industry-wide comparisons with our competition.

The following table sets forth, for the periods indicated, expenses and other items as a percentage of revenue from operations:

                                          Three Months Ended        Nine Months Ended
                                            September 30,             September 30,
                                         2009           2008        2009          2008

  Revenue from operations                 100.0 %        100.0 %     100.0 %      100.0 %


  Operating expenses:
  Salaries, wages and benefits             56.9           50.4        58.0         51.6
  Operating supplies and expenses          14.9           20.7        14.2         20.8
  General supplies and expenses             3.0            3.0         3.0          2.9
  Operating taxes and licenses              3.8            3.2         3.9          3.4
  Insurance and claims                      1.9            2.0         2.0          1.9
  Communications and utilities              1.1            0.9         1.2          1.0
  Depreciation and amortization             7.5            5.3         7.6          5.4
  Purchased transportation                  2.9            2.8         2.8          2.9
  Building and office equipment rents       1.0            0.9         1.1          0.9
  Miscellaneous expenses, net               0.8            0.6         0.7          0.4


  Total operating expenses                 93.8           89.8        94.5         91.2


  Operating income                          6.2           10.2         5.5          8.8

  Interest expense, net *                   1.0            0.8         1.0          0.8
  Other (income) expense, net              (0.1 )          0.2          -           0.1


  Income before income taxes                5.3            9.2         4.5          7.9

  Provision for income taxes                2.0            3.6         1.8          3.1


  Net income                                3.3 %          5.6 %       2.7 %        4.8 %

* For the purpose of this table, interest expense is presented net of interest income.

Results of Operations

Key financial and operating metrics for the three-month and nine-month periods
ended September 30, 2009 and 2008 are presented below:



                                             Three Months Ended                          Nine Months Ended
                                               September 30,                               September 30,
                                      2009           2008         Change         2009            2008          Change
Work days                                  64             64          -  %           191              192        (0.5 )%
Revenue (in thousands)              $ 322,763      $ 415,874       (22.4 )%    $ 934,081      $ 1,201,888       (22.3 )%
Operating ratio                          93.8 %         89.8 %      4.5  %          94.5 %           91.2 %      3.6  %
Net income (in thousands)           $  10,495      $  23,359       (55.1 )%    $  25,190      $    57,629       (56.3 )%
Diluted earnings per share          $    0.28      $    0.63       (55.6 )%    $    0.68      $      1.55       (56.1 )%
Total tons (in thousands)               1,253          1,457       (14.0 )%        3,693            4,280       (13.7 )%
Shipments (in thousands)                1,491          1,733       (14.0 )%        4,381            5,215       (16.0 )%
Weight per shipment (lbs.)              1,680          1,682        (0.1 )%        1,686            1,641        2.7  %
Revenue per hundredweight           $   12.90      $   14.28        (9.7 )%    $   12.67      $     14.08       (10.0 )%
Revenue per shipment                $  216.81      $  240.14        (9.7 )%    $  213.58      $    231.14        (7.6 )%
Average length of haul (miles)            924            894        3.4  %           924              904        2.2  %

Our financial results for the third quarter and first nine months of 2009 continue to reflect the negative impact of the recessionary economy and the increasingly competitive environment within the LTL industry. Capacity in the LTL industry again outpaced demand for freight services during the third quarter, which resulted in aggressive price competition and overall tonnage declines during the third quarter and year-to-date periods of 2009. Due to these factors and the significant decrease in fuel surcharges, our revenue decreased 22.4% and 22.3% for the third quarter and first nine months of 2009, respectively.

To lessen the negative impact of the decline in revenue on our earnings, we continued to focus on improving the efficiency of our operations and the productivity of our workforce. We also continued to be diligent in managing other variable costs. Our success with these initiatives has resulted in significant costs savings, which has allowed us to remain profitable despite the decrease in our revenues. However, the decline in tonnage and the continued pressure on our yields exceeded the cost savings that were achieved during the quarterly and year-to-date periods. As a result, our operating ratio increased to 93.8% from 89.8% in the third quarter of 2008 and increased to 94.5% from 91.2% in the first nine months of 2008. Net income decreased 55.1% to $10.5 million for the third quarter of 2009 and decreased 56.3% to $25.2 million for the first nine months of 2009, as compared to the comparable periods in 2008.

Revenue

The decrease in revenue for the third quarter and the first nine months of 2009 was driven primarily by both decreases in tonnage and revenue per hundredweight. Tonnage declined 14.0% and 13.7% for the three and nine months ended September 30, 2009, respectively, when compared to the same periods of 2008. The third quarter decrease in tonnage resulted primarily from a 14.0% decrease in shipments, as weight per shipment remained relatively consistent with the third quarter of 2008. The tonnage decrease for the first nine months of 2009 resulted from a 16.0% decrease in shipments that was partially offset by a 2.7% increase in weight per shipment. The continued decline in our tonnage year over year was primarily attributable to the impact of the recessionary economy on freight demand, since our research indicates there was no significant change in our market share. We believe conditions in the LTL industry will not improve until there is sustained growth in the domestic economy or a significant decrease in capacity resulting from industry consolidation. Until one or both of these events occur, we could experience additional declines in shipments and tonnage, as well as continued pressure on our yields, during the remainder of 2009.

Revenue per hundredweight decreased 9.7% to $12.90 from $14.28 in the third quarter of 2008 and decreased 10.0% to $12.67 from $14.08 in the first nine months of 2008. The decrease in our revenue per hundredweight for both of these periods was primarily due to the reduction in fuel surcharge revenue, which resulted from a significant decline in the average price of diesel fuel. Fuel surcharge revenue

decreased to 10.3% of revenue in the third quarter of 2009 from 19.7% of revenue in the prior-year quarter and decreased to 9.1% of revenue from 18.3% in the first nine months of 2008. Excluding fuel surcharges, revenue per hundredweight increased 0.9% for the three months ended September 30, 2009 when compared to the same period of 2008 and decreased only 0.1% for the nine months ended September 30, 2009 compared to the same nine months of 2008.

We remain committed to our superior level of customer service, which we believe differentiates us in a marketplace that has been plagued by tonnage declines and aggressive price competition. We have continued to maintain outstanding on-time service performance as well as a historically low cargo claims ratio, which we believe have contributed to the stability of our pricing. We continuously monitor the components of our pricing, including base freight rates and fuel surcharges, and address individual account profitability issues with our customers when necessary. However, we have been unable to sufficiently increase our overall pricing structure to offset declining fuel surcharges during 2009 due to the competitive environment that has resulted from reduced freight demand and overcapacity in our industry. We believe this environment caused many of our LTL competitors to generally reduce their prices in 2009 in an effort to preserve or expand market share. In addition, the pricing competition intensified throughout the third and early fourth quarters and we see no indicators of improvement for the remainder of the year. The prolonged impact of overcapacity in the industry and the aggressive competition on prices could continue to impact our ability to maintain our pricing in future periods, which in turn could have a material adverse impact on our revenue and net income.

Operating Costs and Other Expenses

Salaries, wages and benefits increased to 56.9% and 58.0% of revenue for the third quarter and first nine months of 2009, respectively, from 50.4% and 51.6% in the comparable periods of the prior year. These increases as a percent of revenue are primarily the result of the year-over-year decline in fuel surcharges. As a result, driver wages increased to 22.9% of revenue from 20.3% in the third quarter of 2008 and increased to 23.3% from 20.6% in the first nine months of 2008. Platform wages as a percentage of revenue increased to 6.7% of revenue from 6.5% in the third quarter of 2008 and increased to 6.8% from 6.6% in the first nine months of 2008.

While our salaries, wages and benefits increased as a percent of revenue, the $26.0 million and $77.8 million overall decreases for the three and nine months ended September 30, 2009, respectively, are primarily attributable to a 15.0% reduction in the total number of full-time employees from September 30, 2008 to September 30, 2009 and the improved productivity of our employees. Our P&D shipments per hour increased 5.0% and 3.9% for the third quarter and first nine months of 2009, respectively, reflecting the improved efficiencies and utilization of our experienced drivers. Our P&D stops per hour also increased 5.5% and 3.4% for the third quarter and first nine months of 2009, respectively. Platform pounds per hour increased 17.6% and 18.8% for the third quarter and first nine months of 2009, respectively. Our linehaul laden load average decreased 0.8% for the third quarter of 2009, but increased 0.6% for the first nine months of 2009. These productivity improvements partially offset the impact on our operating ratio of the annual wage increase provided to our workforce in September 2008.

Employee benefit costs increased to 33.0% of salaries and wages from 29.0% in the third quarter of 2008 and increased to 33.2% of salaries and wages from 30.6% in the first nine months of 2008. These increases are primarily the result of higher costs related to workers' compensation claims experience and our group health and dental coverage. Workers' compensation costs for the quarter and year-to-date periods increased primarily due to new claims as well as unfavorable adjustments to reserves for claims incurred in prior periods. Group health and dental costs increased to 11.5% from 10.0% of total salary and wages in the third quarter of 2008 and increased to 12.3% of total salary and wages from 10.4% in first nine months of 2008. These increases were due primarily to an increase in the average cost of medical claims and an increase in the number of claims paid for participants under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").

Operating supplies and expenses decreased to 14.9% of revenue from 20.7% for the third quarter of 2008 and decreased to 14.2% of revenue from 20.8% for the first nine months of 2008. The decrease for both periods is primarily due to the decline in diesel fuel costs, excluding fuel taxes, which is the largest component of our operating supplies and expenses. Diesel fuel costs, excluding fuel taxes, decreased

54.0% in the third quarter as compared to the same period of 2008 due primarily to a 46.8% decrease in the average price per gallon of our diesel fuel, as well as a 13.6% decrease in gallons consumed. These costs decreased 58.0% for the first nine months of 2009, which was primarily due to a 50.3% decrease in the average price per gallon of our diesel fuel and a 15.2% decrease in gallons consumed. The reductions in fuel consumption are the result of a decrease in the number of miles driven for those periods, as well as an overall increase in our miles per gallon. The decreased consumption of diesel fuel also lowered our fuel tax expenses and was the primary reason for the $1.0 million and $3.8 million reductions in "Operating taxes and licenses" for the three and nine months ended September 30, 2009, respectively. We do not use diesel fuel hedging instruments and are therefore subject to market price fluctuations.

Depreciation and amortization expense increased to 7.5% and 7.6% of revenue for the third quarter and first nine months of 2009, respectively, from 5.3% and 5.4% of revenue for the same periods of 2008. These increases are due primarily to the impact of the decline in revenue on these fixed costs and our investment in revenue equipment and real estate during 2008 and the first nine months of 2009. We made a strategic decision to accelerate our tractor purchases planned for 2009 into the first quarter while also retaining the tractors scheduled to be replaced, the majority of which were fully depreciated. We have also purchased additional replacement trailers and continued to invest in expanding the capacity of our service center network, which resulted in capital expenditures of $180.6 million for the first nine months of 2009. Expanding the geographic reach and capacity of our service center network is consistent with our long-term strategies. In addition, we believe the additional equipment capacity puts us in a stronger position to accommodate any future increase in the demand for our services that could result from potential business failures or consolidation in the LTL industry due to the recessionary economy.

Other (income) expense, net includes the net investment gains or losses on the cash value of our variable life insurance contracts related to Company's non-qualified deferred compensation plans. The cash value of these contracts was impacted by the improvement in equity markets during the third quarter of 2009, which favorably affected the quarterly and year-to-date comparisons with 2008.

Our effective tax rate was 39.1% and 39.5% for the third quarter and first nine months of 2009, respectively, as compared to 39.0% for the third quarter and first nine months of 2008. The effective tax rate exceeded the federal statutory rate of 35% primarily due to the impact of state taxes and, to a lesser extent, certain non-deductible items.