Good morning, and welcome to the Fourth Quarter 2011 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through February 12 by dialing (719) 457-0820. The confirmation number for the replay is 5684951. The replay may also be accessed through February 12 at the company's website. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion's expected financial and operating performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Old Dominion's filings with the Securities and Exchange Commission and in this morning's news release. And consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. [Operator Instructions] Thank you for your cooperation. At this time, for opening remarks, I'd like to turn the conference over to the company's Executive Chairman, Mr. Earl Congdon. Please go ahead, sir.

Good morning. Thanks for joining us today for our fourth quarter conference call. With me is David Congdon, Old Dominion's President and CEO; and Wes Frye, the company's CFO. Anyway, after some brief remarks, we'll be glad to take your questions. Our results for the fourth quarter continued the strong trends we produced throughout the first 9 months of 2011 and enabled us to close out the strongest year in our 20-year history as a public company, as well as in the 77 years the company has been in operation. With over 20% growth in revenues for the sixth consecutive quarter, our fourth quarter earnings per diluted share rose 77%. For the full year, we significantly surpassed our previous records for our revenues, margins and earnings per share. We completed the year with the strongest financial position Old Dominion has enjoyed in my 60-plus years at the company. Our service standards are outstanding, our productivity continues to increase and our performance has continued to set the standards in the LTL industry. As a result, we brought a lot of momentum into 2012, and we are pleased to say that we're getting the year off to a good start. While the economic environment remains constrained, we're continuing to gain market share and produce profitable growth. Because of our promise to provide a strongly differentiated value proposition, the outstanding execution by our entire team of a business model that combines continuous investment and technology and capacity. And our long-term yield management strategy that has enabled our customers to understand the value that the company's high-quality services bring to their supply chain. In addition to the strengths of our organization, industry fundamentals also remain favorable. As a result of tonnage growth, industry consolidation and underinvestment by many of our peers during the economic downturn, the industry has limited excess capacity and equipment, facilities and drivers. This balance of supply and demand supports a favorable pricing environment. Based on these industry dynamics and the outstanding operating execution by all members of the OD family, we are optimistic about our prospects for further growth in earnings and shareholder value in 2012 and the years ahead. Thank you for your interest in Old Dominion and your support. Now, here's David Congdon to discuss our fourth quarter operations in more detail.

Thank you, Earl, and good morning. Old Dominion had a great fourth quarter and a truly historic year. The strength of our performance for 2011 reflects both the day-to-day execution by people throughout Old Dominion with a value proposition and a business model that had been many years in the making. And we believe we are well positioned to continue outperforming our industry in 2012 and beyond. The foundation of our success remains our promise to provide on-time claims-free service at a fair and equitable price. And while enhancement and refinement of our capabilities never ceases, we are committed to executing our proven, established business model in 2012 and beyond while focusing on service, density, yield and efficiency. In terms of service, we believe we continued to lead the industry during 2011 with 99% on-time delivery at approximately 50 basis points for our cargo-claim ratio. Our ability not only to sustain this best-in-class performance over a multi-year period but also to improve it, as we did in the fourth quarter and for the full year 2011, reflects our ongoing company-wide promise to providing customers with the highest quality service. Our focus on improving density was a key factor in producing a 2011 operating ratio that was a 220 basis point improvement over our previous record operating ratio of 89.8% in 2006. The increase in our CapEx plans for 2012 is a direct result of the continuing market share gains, as well as opportunities we see within our service center network for continued density improvements and profitable growth. Our long-term commitment to the highest quality service also drives and supports our focus on yield management because one cannot be sustained without the other. Rather than pursue a short-term strategy of maximizing yield, our long-term focus is to optimize yield by agreeing…

Thank you, David, and good morning to all. For the fourth quarter of 2011, Old Dominion's revenues was $485.1 million, representing an increase of 21.6% compared with the fourth quarter of 2010. The growth in revenue was driven by a 9.7% comparable quarter increase in tons and a 10.7% increase in revenue per hundredweight. Our tonnage growth was comprised of a 9.8% increase in shipments and a 0.2% decline in weight per shipment. Weight per shipment declined each quarter in 2011 primarily due to changes in freight mix, especially the reduction of volume shipments. Earlier in 2011, we also experienced shippers disaggregating shipments into smaller, more frequent deliveries and a reversal of the trend during the economic downturn toward shipment consolidation. It's worth noting that the comparable period weight per shipment increased in December as well as January of this year 2012, the only monthly increase since the slight increase that we had in February of 2011. Sequentially, throughout the fourth quarter, tonnage growth per day was 10.3% for October, 9.4% for November and 9.2% for December as compared to the prior year periods, with each month facing tough comparisons in the high teens to low 20s during 2010. For January 2012, tonnage has increased 14.2% compared to a 14.9% increase in January of 2011. We expect tonnage to increase in the 13% to 14% range year-over-year for all of the first quarter against sequentially tougher comparisons. Revenue per hundredweight, excluding fuel surcharge, increased 6.4% for the fourth quarter, a bit below the 7% to 8% range that we originally anticipated. The revenue per hundredweight had an upward influence during the quarter by a 0.2% decline in weight per shipment, although the 0.7% decline in the length of haul had a negative impact. Against sequentially higher revenue per hundredweight in…

[Operator Instructions] We'll go first to David Ross from Stifel, Nicolaus.

David, you talked in the last quarter about an increase in maintenance costs due to some of the equipment that you had in requiring, I guess, an advancement of the replacements. Can you talk about what maintenance costs you did year-over-year in the quarter and whether the accelerated replacements have kind of kept that down?

I'll let Wes reflect on that -- on those numbers. I think he has them in front of him.

Yes, our maintenance cost was up slightly. Only 10 basis points, up slightly. So while a little bit higher, still fairly reasonable.

And as far as the pricing in the marketplace for LTL right now, are you seeing any pockets of irrational competitors anywhere, or is it pretty level in terms of the rate structures?

It seems to be pretty rational right now and no real pockets of irrationality.

And last question just regarding the tonnage growth you're seeing, which is great and unusual actually for the companies reporting so far. Have you increased the size of your sales force recently, and is there any anticipation of doing so in 2012?

There's been no major increase in the size of our sales force.

And we'll move on to Tom Wadewitz with JPMorgan.

Let's see, I wanted to ask David a little bit more on the pricing topic as well. Your comments earlier in the call were pretty constructive in terms of the competitors' underinvesting in capacity, and it sounded like maybe you thought the market would be reasonably tight. But then later on, you talked about the deceleration in pricing going into 2012. And I just wondered if you could explain that a little bit further, and why you think there is the deceleration pricing if capacity would appear to be reasonably tight.

I wouldn't call it, Tom, a deceleration in pricing. I will call it facing, as I mentioned in my comments, facing tougher comparisons as we're beginning to circle around what we see was an improving rating environment in the first quarter of 2011.

Okay. Is it -- I mean is it just a first quarter comp or is it a full...

For the whole year of 2011, pricing was up in the -- well, not pricing, yield was up. Revenue per hundredweight was up for the whole year about 6%. Actually about 7% for the whole year. So we got some really good yields in 2011, but you can't expect and I don't think the economy will permit you to do that continuously. But we are successful in continuing to get price increases and I would say, on average, between -- in the 3% to 4% range. So a lot of the increased yields or the revenue per hundredweight lowering in 2012, some of that is due to mix. But you don't expect your -- we would love for it to happen, but we don't really expect pricing to continue in the 6% to 7% range this year.

Okay. But just to make sure I understand it though, you're saying 2011, you got something like 7% in revenue per hundredweight ex fuel and first quarter, you're looking at 1.5% to 2% ex fuel?

Correct. The first quarter of last year, we were up almost 6%.

Okay. I mean is it comparison such as that 1.5% to 2% potentially would accelerate when you look at second or third? Or is the comparison kind of similar in first, second, third quarters?

The answer is yes. When -- the only visibility we have right now into the first quarter is January. So much of our forward-looking information that we are projecting against the entire first quarter is based on what we're seeing in January. And as you might imagine, that can change, yes.

Tom, I would also like to add that yield is not just all about revenue per hundredweight. That's just an indicator. And it's really all about managing the operating ratio that you have with each and every account and the profitability. And we -- as we stated before, we believe that the pricing environment is still good and is favorable. And we'll continue to adhere to our philosophies of arriving at a fair and equitable price for the services rendered, that results in appropriate level of profitability.

Great. It seems like you don't -- others need price a lot more than you do. Your margins are pretty impressive.

And next from SunTrust Robinson Humphrey, Alex Brand.

I just want to get your thoughts on driver pay this year, and if you could tie that into kind of a year that you're stepping up the investment. Is this a year where maybe it's not as realistic for you to drive down your OR in a step function like you did in 2011?

Well, I would say that the 3% that we gave in September were more than offset, or at least substantially offset by the fact that our employees continue to improve productivity. So we look at all of those factors.

It would seem logical, too, that the lower the operating ratio gets, the tougher it is to add as many basis points as we added last year.

Oh, no doubt.

I mean, goodness gracious.

Otherwise, we'll be operating like the railroads.

And what about -- what percentage of revenue is logistics or international now? And what effect does that have on the overall company operating ratio?

Our overall value-added services, which includes our global division, our expedited and our logistics division comprises about 8.5% of total revenue this year. And last year, it was about 7.6% in the same quarter. And we don't provide a breakdown of the profitability of those versus the LTL division. And we don't have those numbers. We don't provide those numbers, I should say.

Okay. Does the $200 million of CapEx for equipment this year, does that completely -- does that get you full replacement of the '04 engines?

No. I don't believe so. Are you referring to some comments we made at the last quarter?

Yes.

Yes. We're -- I didn't bring that with me, though. Exactly what percentage of the '04 engines will be cycled out with this year's CapEx. But I do not believe that it's all of them.

Next, we'll hear from Chris Wetherbee of Citi.

I was wondering if you could talk a little bit about the tonnage growth that you're seeing in the first quarter. It seems like a nice acceleration from the fourth quarter rate of growth. And I guess I just wanted to get a sense of kind of where you're seeing some of this come from. I know it's a little bit difficult to delineate what's share gains versus what's kind of economic growth activity. But if you could give us a sense of how you think about that and maybe why we're seeing that step-up in the first month at least.

Well, first thing is the weather affect. We have not been hammered this year with the weather like we were in the first quarter of last year. We've seen some daily year-over-year increases that shocked us, and then we were reminded that the entire Midwest and Northeast was shut down this same day last year. But that's been the greatest change factor has been more favorable weather this year. And as far as where our growth is coming from, we have really across the board in all of our nonoperating regions a pretty strong growth occurring. But as has been the case over the last couple of years, our strongest growth has tended to be in the Northeast, across the Ohio Valley, Midwest and Central states, and the South and Southeast, where our -- where we are the most mature has been a lower growth rate. But I will say that our South had a pretty strong growth in the fourth quarter, stronger than it had been. So we're very encouraged about that.

Great, that's helpful. And then just as a follow-up. When you think about the capacity level, you talked about kind of some of the CapEx additions that you're looking to do, how do you feel about where you are as far as available capacity in the network? And then maybe geographically, where you looking to allocate that capital in 2012?

Our story on network capacity is about the same as we have relayed to you in the past several calls. We have service centers who might have 50% or 60% capacity as you look at their pounds per door per day compared to the service centers who are at 100% and out of capacity when you look at the pounds per door per day. Our overall capacity in the network is probably, on average, 25% to 30% capacity in our network. But we like to have excess capacity because freight flows more fluidly when you're not having to swap your doors between -- go around the dock and rehandle your freight because you don't have enough room or doors to process your freight. So that's basically the network capacity. And as far as equipment is concerned, I'd say we've got 5% to 10% there now.

And geographically, how do you think about allocating some of the capital in '12?

We basically -- on the real estate, the capital is being allocated where we have the highest growth and where we have outgrown our facilities. So it's not -- it could be -- it's in a lot of different places. It's not necessarily one region of the country or another.

Moving on to Todd Fowler with KeyBanc Capital Markets.

Dave, your comments in the prepared remarks about improving density and some of the benefits that you're seeing there, is that a function of some of the growth that you've had in the past couple of years that you've got the opportunity to improve the density? Is that -- is some of the initiatives just with the network and what you're doing with trailers, can you talk about kind of where you're at on a density initiative or how you think about that going forward?

Well, we have built a company that started with an inter-regional type network, and we've grown to serve every point in the United States. We have next-day and 2-day service within each geographic region of the country, next-day to third-day service between contiguous regions and best-in-class long-haul service. So that service product combined with all of our value-added services, our on-time service ratio, our cargo-claim ratio, this gives us a network and a service capacity that customers like today, and that's what's winning market share. That's all done at a fair and equitable price.

But I guess as far as specifically, I mean some of the benefits that we think that are probably surfacing and the incremental margins from things on a density side. I mean, is that something that -- I mean is there -- does that continue into 2012? I mean, is there still more opportunity, I guess, on improving the density within the network from where you ended the year?

Well, our density improvement has been pretty significant. As I've -- one of the numbers I watch every day is what our average daily shipment count is and what our average daily tonnage is. And for the last half of this year, we've been running nearly 3,000 shipments a day and 5 million pounds a day more freight through the network. And that leverages your fixed cost, it puts your pickup and delivery stops closer together, and the density improvements are evident in our operating ratio improvement. So it's a combination of density and yield management that are the primary -- and efficiency improvement, too, that are the primary drivers of that operating ratio improvement, and the incremental margins.

To be specific, Todd, we had our revenue per service center, even if you exclude fuel surcharge, was up 11% in the fourth quarter. That's despite the fact that we added 6% to a number of doors through expansion, we were still -- had significant density advantage and that's been one of our focuses. Even looking at shipments per terminal, it was up 8%. So we had very, very good density improvements in the fourth quarter and for the year for that matter.

Our tonnage increase compared with our headcount increase is another measure of improved productivity primarily. And we have added a much -- a smaller percentage of headcount as compared with where our tonnage has grown.

Okay, all that makes sense. Just for my follow-up, Wes, of the $195 million to $210 million of CapEx for tractors and trailers, did you give a breakout for how much of that would be growth versus replacements? And do you have an estimate for where the fleet age is now and where it will be at the end of 2012?

Yes, Todd. We haven't given that breakout because we're not giving guidance on tonnage growth.

Okay. What about the fleet age piece of that?

We haven't computed the effect of that CapEx on the fleet age, but our intent is to somewhat reduce what our average fleet age has been over the last couple of years because we have postponed some replacements during the downturn. And part of our CapEx is getting back to a replacement cycle that what we feel is more appropriate to average age.

And during the downturn, we retained some old trucks and parked them against the fence to have excess capacity in the event of a potential consolidation event.

And we'll go next to Scott Group with Wolfe Trahan.

So just wanted to get back to the margin discussion from earlier. And you said it's unreasonable to expect a similar pace of margin improvement this year like we saw in 2011. I just want to understand if you're still confident there is at least some margin improvement this year, or if you think it's more fair to expect strong revenue growth kind of flattish margins and continued earnings growth that way, just more from the top line.

Scott, currently we are not giving any forward-looking guidance on those metrics.

Okay, worth a shot. In terms of the weight per shipment, you talked about an inflecting positive in December. What's driving that? And how do we think about weight per shipment going forward in 2012?

Well, we still don't have visibility for the entire year. What we have shown over the last 2 months, those months being December and January, that our weight per shipment is again up. And it's -- and while some of that could be due to mix, I mean, we're seeing that it's up both in our LTL. And we're not sure what to make of that yet. From an economic standpoint, typically, increased weight per shipment. As long as it's not -- doesn't coincide with the number of shipments declining, I think it's a fairly still positive turn on the economy. But I don't want to give the impression there's a tremendous increase in weight per shipment. It's up, as I'd mentioned, in January was up 2% year-over-year. But I would -- and we've had a fairly healthy increase in number of shipments. So I still think that's kind of a positive statement from our view.

Okay, that makes sense. And in terms of the CapEx, the $300 million to $350 million, I think I remember last quarter, you talked about preliminary expectations of $350 million. Now you just have a bit of a range. Can you talk about what's changed? We're a little bit less on CapEx relative to the initial plan.

We always hedge the number because sometime the timeline of getting these service centers, especially if you're -- what we normally do is we put the list of the service centers we need to expand, and we put those on a list for CapEx. And sometimes it takes longer, especially if you're constructing new facilities, to find the land or to get the timeline of construction completed. So that's where the hedge is. I think the equipment is pretty much a done deal, but the range is really caused by the uncertainty about timeline of the real estate.

And from Deutsche Bank, we'll move on to Justin Yagerman.

It's Rob Salmon on for Justin. Could you guys talk a little bit about incremental margins? Historically, we thought about the LTL business as generating kind of 10% to 20% incremental margins. And you guys are talking to right now accelerating tonnage growth while we're seeing the yield improvement slowing off much tougher comparisons. How should we think about those 2 balancing out as we think about incrementals for 2012?

Well, we don't give -- we're not giving guidance on incremental margins either, other than the fact we've always stated that where we can grow an existing network, that it should range anywhere from 10% to 15%. Now depending on pricing, it could be a little bit better than that. And so I'll just leave it at that. Obviously, it was much better than that for the whole of 2011, but we did have a fairly substantial increase in our yields, excluding revenue per -- excluding fuel surcharge, so.

Understandable. That's just...

Maybe with a range of 10% to 20%.

That's fair. I was just trying to get at the same OR question that Scott was trying to get at and see if we could attack in a different way. When I'm thinking about the Northeast, you guys called that out as being a very strong -- strong growth that you had seen there. Could you, guys -- have you guys been seeing any sort of dramatic tonnage gains as a result of the shale plays? To any extent you guys can comment on that will be helpful

Sorry, Rob. Say again? Oh, I see. I got you. We don't have a gauge on that right now. We don't haul any oil. We use it.

Yes, I think you guys might bring in a little bit of heavier equipment in there, but most of that stuff, to us, felt like it would be coming on a flatbed. We're just trying to kind of dot I's, cross T's. And could you guys give us quarter ending headcount and service center numbers for 2012 -- sorry, 2011?

I will circle back to that. Once I get it, I'll come back to that. Stay on the line, Rob. I'll just mention it when I find it.

And next, we'll move on to John Godyn with Morgan Stanley.

I was hoping you could elaborate on your comments on productivity and the fact that productivity during the fourth quarter improved, even at a significantly stronger rate than what you achieved for the full year. When we think about modeling another year of potentially significant volume growth in 2012, is additional volume growth here associated with higher, lower or similar incremental costs versus the trend that you've had at the end of 2011? I'm just trying to understand the productivity comments.

This is David. I'll make one comment about the productivity improvements. We have a lot of efforts going on improving productivity. But one of the numbers in particular that stood out was our dock productivity being up. I think it was 5. -- maybe it was 5.4 -- I think it was 5.4% in the fourth quarter. And last year, in 2010, we were seeing a lot of acceleration in our business from the second -- in the second and third quarters. And we added a number of people on the docks in the third and fourth quarters of 2010. And those employees were not as productive during their initial time with the company, which put a damper on our productivity statistics in the fourth quarter. And now as we've had stability in our workforce and less hiring this year, the year-over-year comparisons, especially on the dock, are reflective of that. Does that answer your question or would you like to further or want to ask again?

No, that's helpful. And if I could just ask a follow up on just your comments on revenue per hundredweight excluding fuel surcharge in the first quarter. I know you guys don't give full year revenue per hundredweight guidance, but just with where it is and what the comps look like throughout the year, I mean, does it seem impossible that toward the end of the year, you might see negative price excluding fuel surcharge growth? Is that reasonable or am I missing something in the comparisons?

As long as the industry overall remains disciplined, which we think that they will, we can't envision that the revenue per hundred-- the pricing will become negative.

Okay. And just last question. Can you give us a sense of what you're hearing from customers just regarding inventory levels in the economy? Of course, some other carriers have cited some weakness. Are you seeing that as well?

Honestly, we don't run a survey like that about inventory levels, so we don't have a real good feel on that. We would rely more on the economists who produce that kind of data to tell us.

To Rob. Rob, your answer. We had at the end of the quarter 216 service centers and 12,026 full-time employees.

And we'll move on to Jack Waldo with Stephens.

Wes, my 2 questions are focused on the CapEx side. Wes, first off, how it impacts D&A. What would you be expecting for D&A in '12?

Well, it would be higher. As a percent of revenue, probably not too much higher. But obviously, when you put that much CapEx, especially on the equipment, the real estate doesn't have nearly the effect because you're depreciating that over 20 years, and you're taking out the costs of -- and you don't appreciate the cost of land when you have residual on the structure. But I'd say, it ran at least a little higher from a dollar standpoint, but not so much higher as a percent of revenue.

Got you. Okay. And I said -- but my other question is on the insurance side. Was there anything abnormal about insurance this quarter?

No. I mean, we go through the same calculations and actuarial that we do at the end of every year. We did have a favorable impact on our cargo and BIPD, but we had some unfavorable impacts on our group health, which is not in the insurance line, it's up in fringes. So all those things -- and that goes every quarter. It's all trued up at the end of every quarter. So it's nothing unusual, it's just the normal course of how you evaluate those reserves.

Moving on to Tom Albrecht with BB&T.

Most of my questions have been answered. Wes or David, though, I did want to explore a little bit more on the weight per shipment. I know you talked about it as well. But, Wes, did you say you're seeing both truckload and LTL shipments increase slightly? Or was it just concentrated on the LTL side?

Across-the-board, predominantly. But I know that last year, we saw a significant or fairly sizable decrease in weight per shipment, much of that was mix. When we saw the percent -- when we saw our spot quotes actually decline in terms of shipments and tonnage year-over-year. So just from a mathematical weighting, that would happen. We're not seeing so much of that this year, and it's kind of across-the-board that we're seeing slight increases in weight per shipment, with the mix not changing quite so much.

And how about the trends -- I've forgotten where you break it off, but let's say, above 5,000 or above 10,000 pounds, which are always a little bit of a readthrough for the truckload tightening. Do you have a figure there you can share? Or maybe not so much the change in weight, but maybe the growth in shipment count?

For heavyweight shipments.

Yes. I don't have it in front of me. I can get back to you on that.

Yes, I'd love to get that color and off line is fine.

And from Wells Fargo, we'll hear from Anthony Gallo.

One housekeeping item and then a question about market share. Wes, the $521,000 of other income, could you tell us what that is?

If you recall, in the third quarter, we had negative number in that line, and it has to do with our phantom stock -- not phantom stock -- excuse me, non-qualified deferment -- salary deferment plans that's tied to indexes of stock, because that's where the participants have got the money. So we had an improvement in the stock performance of those portfolios in the fourth quarter. Consequently, there was a positive reflection of that in the fourth quarter that offset some of the negative reflections that happened in the third quarter.

Okay. That's helpful. And then I want to go back to the comment about market share gains, which we think is at play here as well. Can you provide a little bit of insight? You don't have to name carriers, obviously, but is it mid-market accounts? Is it national accounts? Is it by region? We're just obviously trying to get a handle on it as well, looking at some pretty sub-par tonnage growth at a lot of the bigger players. Not necessarily drawing a direct line to them, but we want to better understand where you think the share gains are coming.

We think that it's coming from really all types of customers, from the small mom-and-pop to the larger national accounts as well.

And from all carriers.

And from all carriers. And all geographies. So it's just sort of an across-the-board phenomenon.

And then I did notice -- I think I saw an announcement, OD Home? Home Deliveries? Is that correct?

Yes.

Is that tied to specific e-commerce initiatives? Or is that an extension of some things you've historically have been doing?

It's a new initiative that we think will complement our existing LTL business and help fill some empty or light lanes. And actually, it will leverage the network because there's no investment in tractors or trailers. And we see a lot of potential in growing that business to a sizable figure over the next 2 or 3 years.

Moving on to the Ben Hartford with Robert W. Baird.

I just wanted to discuss the logistics side. It sounded like in the prepared remarks, you left the door open to potential acquisitions when you were talking about evaluating opportunities. Obviously, the LTL network has been built organically. So to what extent are acquisitions a part of the strategy on the logistics side? And how comfortable are you with identifying targets and feeling comfortable with being able to absorb potential acquisitions?

We always -- it's Earl. We're always interested in acquisitions. And when propositions are run by us, we take a look at them. But it's not anything that we really can comment on at this time. But we may do one if one gets attractive for us or we may not. We probably turned down a zillion of them and -- but we look every time one comes across the board.

And we continue to pursue our organic growth strategies in the value-added services arena.

Sure. And I guess, when you're evaluating those potential targets, do you have a bias toward small tuck-ins that complement the organic growth that you are executing? Or are you interested in doing a bigger one that would allow you to accelerate developing scale in that segment?

We're not interested in a bet-the-company -- anything that will bet the company size, we can tell you that. But smaller ones would be of more interest to us.

Next, we'll hear from Jason Seidl with Dahlman Rose.

Just a couple of quick ones. Wes, you brought up the weather comparisons. And I think that's pretty apt from 1Q '11. Can you talk about what weather probably cost you in the quarter last year so we can sort of get a better feel for margins at least in the near term?

I can't give you specifics on what it cost us for the quarter because sometimes it's hard to grasp -- although the weather -- if you'll recall last year, we were socked very heavily with rough weather in January and February, but March came back fairly strongly. And that sequential strength coming back, we're not sure how much catch-up that was. So for the quarter, some of it nets out. We just don't know how much. I do know that we operated -- for us, in January of last year, with not -- with the margins that we weren't pleased with, but they came back strongly as the quarter proceeded. So I can't -- to answer your question, I really can't tell you exactly what the weather cost us last year, because I don't know how much it was netted out as we proceeded through March.

Well, I mean, you still had very, very strong OR margin gains there. So I was just trying to figure it out when I was looking at it, so I can get a feel for where I think you can come out this quarter. But you never recover 100% of the freight that you lose, right? It's always...

Probably not.

Something less than -- but probably above 75%?

It's really hard to measure that total impact of the weather, but there was one other question asked earlier about our maintenance cost, and I will point out again that we had a lot of equipment parked against the side of the fence during 2009. And also, during -- by the first half of 2010, we still had a considerable amount of equipment parked. As we started seeing business ramp up in the third and fourth quarters of 2010 and into the first half of 2011, we started pulling this equipment off the fence that had been sitting for nearly 2 years, and our maintenance cost was through the roof during that period of time. So we're not faced with that same maintenance cost, those cost levels this year that -- like we had last year. So that's helped some of that margin improvement, but I can't put a pencil or I can't tell you right at this minute how much that was.

Okay, that's fair enough. Wes, one more quick follow-up here on that tax gain in the fourth quarter. Do you have a dollar amount that that was for us?

It was about $1 million of credit. So we're very green in the fourth quarter. No pun intended.

And next, John Barnes from RBC Capital Markets.

Just real quick, if I think about the margin improvement that you've shown, I'm kind of curious as to where that stands versus kind of your volume levels. And what I mean is, we've had an economy kind of creeping along, you have picked up some market share. Would you see -- would you expect to see some erosion in the margin in the event that the economy took off at a little bit faster pace, and all of a sudden, you started to fill up some of that excess capacity? Would you anticipate seeing a little bit of margin erosion at least initially as you maybe had to ramp up headcount or anything like that?

I'll just say no.

Okay. I'll take that. And then secondly, if I look back at my model that I've got built back into the mid 1990s, we see kind of a trend where you go through a 5-year period where you'd be at a fairly -- improving but a fairly stable margin. In the mid '90s up until 2000, it was kind of in that mid 90% range, then we went to a 4- or 5-year period where it got down in the low 90s. Do you feel like you're on that same kind of stairstep function that we've got a multi-year where you are at this margin level before you could stairstep it again? Or I'll go back to your comment about at some points you're operating at a rail margin, which I don't think anything -- anybody here is going to argue with. But, Dave, do you think you're at this -- at a kind of multi-year period where you can sustain this level of margin?

We're not giving that guidance. But all the past year, the history, whether they repeat themselves, will depend upon the nature of the economy, the nature of the pricing and a lot of variables. And we really don't know what those variables are going forward.

Our management team has a bearing on that, too, and we have a superior management team on board today.

And next, we'll hear from David Campbell with Thompson, Davis & Company.

Maybe you ought to get greener in 2012. Put some more of those solar panels in.

Maybe you're right, David.

Get the tax rate down again. I mean, might as well take advantage of all those tax breaks. I guess, there's nothing in the plans at this point?

Well, not at this point. I mean, we -- in my comments, I mentioned that our tax rate that we're using this year is 40%. So we are -- the propane credit is gone and whether we use any more of the solar hasn't been decided, but as you can see, in that number of 40%, we're definitely playing -- paying our fair share of taxes.

No. That's not any good. That's not fair. You ought to get lower taxes.

I agree.

One question -- last question is, you've mentioned the fee-based added value-added services in there, including in -- inclusion in the revenues, and that percentage is growing. Much of that doesn't have any tonnage associated with it. So doesn't that by itself increase your so-called yields per ton?

Well, a lot of it does have tonnage involved in it because we're including our North America LTL business, which is all tonnage, but we're including our container drayage operations, which also is part of the reason why our -- when we made our -- give you our overall weight per shipment, it includes those heavier-weighted container shipments.

Yes, right.

So there's not a lot of it that does not have tonnage associated with it?

Not a material --

Not a material amount now. We have our truckload brokerage, which does not have tonnage. And we have our logistics business, which has some tonnage associated with it, but not less.

Right, right, right. But you're using a lot of this fee-based business, I gather, as a way of getting into new business, getting into some tonnage business of accounts? Or not so much of that?

Well, everything that we do with our value-added services, we look for ways to complement our network and complement our mothership LTL business.

And Matt Young for Morningstar has our next question.

Looking at the regional business, primarily the next-day and the second-day, I was just wondering if there was much of a difference in the magnitude of yield gains or your pricing power in the regional versus the longer haul and national freight, just to get a feel for the competitive dynamics there.

I think that what we've seen over time is that regional business tends to be priced a little more aggressively than the inter-regional and long-haul business, primarily because there remains some smaller regional carriers who -- that's all they do. It's the regional business and they tend to offer lower prices in order to get that business and hold that business.

Fair enough. And I know you guys have been kind of perfecting or integrating that business for more than a decade or so while some of the larger -- other larger competitors have been a bit more recent in their efforts. Just wondering if you think some of the other -- some of your key competitors in that market have been getting their act together in terms of competing there.

Well, there's one of them that is coming out of it. YRC is -- I believe announced that they are coming out of the next-day market.

That's true. Any other trends from some of the other carriers that -- some of your other close competitors that have been doing it that you feel like they're getting better?

I don't know. That's for you to judge.

Next, we'll hear from Dan Moore [ph] from Scopus.

Real quick. Just curious, could you talk a little bit about pricing -- normal pricing trends, or better yet, normal pricing trends from fourth quarter to first quarter in the context of seasonality? So the sequential change.

I really don't know how to answer that question. We don't really track seasonality from a pricing standpoint. Don't know if it is a seasonal -- we just don't adjust pricing because of seasons.

Sure. Well, I guess, I'm thinking that normally, there's some dropoff, but I could be wrong.

Or you could be right.

Contract pricing. Could you talk a little bit about what you're seeing on contract -- existing contract renewals currently and what you saw in the fourth quarter?

Yes. We continue to be successful in getting some increases from our contractual customers. I'd say, probably in the 3%, 4% percent range.

Okay. And again, what was that experience last year?

Probably in a similar range, maybe a little bit more.

Okay. Like maybe a 1% difference? Or do you think that's fair or?

No. I'd say it's in the 4% to 5% range.

And we'll go back to Scott.

I'm actually all good as well.

And then Jason Seidl?

I actually do have a question, guys. You talked a little bit about YRCW getting out of the next-day business. Do you think you're seeing any of those market share gains in terms of the tonnage re-acceleration growth due to that fact?

Just announced it yesterday, I think, or a day before yesterday.

We don't know how much they have.

Okay. So it's too early to tell, but beyond that, that could keep up your tonnage growth going forward if you see some of that business then?

There won't be enough of it to fill a teaspoon, I'll bet.

And gentlemen, there are no further questions at this time. I'll turn the conference back over Earl. Please go ahead.

Listen, guys, as always, we certainly thank you for your participation, and we appreciate your questions and your support of Old Dominion. So please feel free to give us a call if you have any further questions. Goodbye.

Ladies and gentlemen, that does conclude today's conference. Thank you for joining.