“Old Dominion’s operating ratio for the fourth quarter of 2011 improved 360 basis points from the fourth quarter of 2010 to an 86.9%. We also produced the best annual operating ratio in our Company’s history at 87.6%. This performance was driven primarily by operating leverage generated by the growth in tonnage and further improvement in our revenue per hundredweight. In addition, we improved the productivity of our linehaul, pickup and delivery and platform operations during the fourth quarter at a significantly stronger rate than what we achieved for the full year. Our industry-leading performance for on-time and claims-free service remained strong during the fourth quarter and has contributed significantly to our ability to expand our market share.”
Capital expenditures for the fourth quarter were $40.3 million, bringing the total for the year to $250.2 million. These expenditures included the opening of the Canton, Ohio service center in October, bringing the total number of service centers in operation to 216 at year end. The Company also relocated and expanded four service centers during the fourth quarter. For 2012, capital expenditures are anticipated to range between $300 million to $350 million. This estimate includes $90 million to $120 million for real estate purchases and expansion projects at existing facilities, subject to the availability of suitable real estate and the timing of construction projects, $195 million to $210 million for the purchase of tractors, trailers and other equipment, and $15 million to $20 million for investments in technology.
Old Dominion expects to continue to fund capital expenditures primarily with cash flow from operations. In addition, the Company’s financial position at the end of 2011 was stronger than at any time in its history as a public company. Total debt to capitalization improved to 23.9% at the end of 2011 from 24.5% at the end of the third quarter of 2011 and 28.9% at the end of 2010. The Company also had $75.9 million in cash and cash equivalents at the end of 2011 compared with $5.5 million at the end of 2010. In August 2011, Old Dominion entered into a new five-year, $200 million senior unsecured revolving credit facility. At December 31, 2011, there were $49.9 million of outstanding letters of credit, but no borrowings outstanding on this facility.
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