SAIA INC 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and our 2021 audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Those consolidated financial statements include additional information about our significant accounting policies, practices and the transactions that underlie our financial results. Forward-Looking Statements The Securities and Exchange Commission (the SEC) encourages companies to disclose forward-looking information so that investors can better understand the future prospects of a company and make informed investment decisions. This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations,” contains these types of statements, which are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “plan,” “predict,” “believe,” “should” and similar words or expressions are intended to identify forward-looking statements. Investors should not place undue reliance on forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, except as otherwise required by applicable law. All forward-looking statements reflect the present expectation of future events of our management as of the date of this Quarterly Report on Form 10-Q and are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors, risks, uncertainties and assumptions include, but are not limited to, the following: • general economic conditions including downturns or inflationary periods in the business cycle; • operation within a highly competitive industry and the adverse impact from downward pricing pressures, including in connection with fuel surcharges, and other factors; • industry-wide external factors largely out of our control; • cost and availability of qualified drivers, dock workers and other employees, purchased transportation and fuel; • inflationary increases in operating expenses and corresponding reductions of profitability; • claims expenses and other expense volatility, including for personal injury, cargo loss and damage, workers’ compensation, employment and group health plan claims; • cost and availability of insurance coverage, including the possibility the Company may be required to pay additional premiums, assume additional liability under its auto liability policies or be unable to obtain insurance coverage; • failure to successfully execute the strategy to expand our service geography; • costs and liabilities from the disruption in or failure of our technology or equipment essential to our operations, including as a result of cyber incidents, security breaches, malware or ransomware attacks; • failure to keep pace with technological developments; • labor relations, including the adverse impact should a portion of our workforce become unionized; • cost, availability and resale value of real property and revenue equipment; • supply chain disruption and delays on new equipment delivery; • capacity and highway infrastructure constraints; • risks arising from international business operations and relationships; • seasonal factors, harsh weather and disasters caused by climate change; • economic declines in the geographic regions or industries in which our customers operate; • the creditworthiness of our customers and their ability to pay for services; • our need for capital and uncertainty of the credit markets; • the possibility of defaults under our debt agreements, including violation of financial covenants; • failure to operate and grow acquired businesses in a manner that support the value allocated to acquired businesses; • dependence on key employees; 12 • employee turnover from changes to compensation and benefits or market factors; • increased costs of healthcare benefits; • damage to our reputation from adverse publicity, including from the use of or impact from social media; • failure to make future acquisitions or to achieve acquisition synergies; • the effect of litigation and class action lawsuits arising from the operation of our business, including the possibility of claims or judgments in excess of our insurance coverages or that result in increases in the cost of insurance coverage or that preclude us from obtaining adequate insurance coverage in the future; • the potential of higher corporate taxes and new regulations, including with respect to climate change, employment and labor law, healthcare and securities regulation; • the effect of governmental regulations, including hours of service and licensing compliance for drivers, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, regulations of the Food and Drug Administration and Homeland Security, and healthcare and environmental regulations; • unforeseen costs from new and existing data privacy laws; • changes in accounting and financial standards or practices; • widespread outbreak of an illness or any other communicable disease, including the COVID-19 pandemic, or any other health crisis or business disruptions and higher costs that may arise from the COVID-19 pandemic in the future, including governmental regulations requiring that employees be vaccinated or be tested regularly for COVID-19 before reporting to work; • increasing investor and customer sensitivity to social and sustainability issues, including climate change; • provisions in our governing documents and Delaware law that may have anti-takeover effects; • issuances of equity that would dilute stock ownership; and • other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC filings. These factors and risks are described in Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated by Part II, Item 1A. of this Quarterly Report on Form 10-Q. As a result of these and other factors, no assurance can be given as to our future results and achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of future events or circumstances and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by applicable law. Executive Overview The Company’s business is highly correlated to non-service sectors of the general economy. The Company’s strategy is to improve profitability by increasing yield while also increasing volumes to build density in existing geography and to pursue geographic expansion to promote profitable growth and improve our customer value proposition over time. The Company’s business is labor intensive, capital intensive and service sensitive. The Company looks for opportunities to improve safety, cost effectiveness and asset utilization (primarily tractors and trailers). Pricing initiatives have had a positive impact on yield and profitability. The Company continues to execute targeted sales and marketing programs along with initiatives to align costs with volumes and improve customer satisfaction. Technology continues to be an important investment that is improving customer experience, operational efficiencies and Company image. COVID-19 We are continuing to monitor the progression of the COVID-19 pandemic, further government response, and development of treatments and vaccines and their potential effect on our short-term and long-term financial results and liquidity. These events could have an impact in future periods on certain estimates used in the preparation of our 2022 financial results. Local, state and national governments have designated transportation as an essential service. The Company has made a variety of efforts to ensure the ongoing availability of Saia’s transportation services, while instituting actions and policies to help keep employees and customers safe. 13 We believe we have significant liquidity available to continue business operations in the event of future disruptions from the COVID-19 pandemic. As discussed in “Financial Condition, Liquidity and Capital Resources” below, t he Company has in place a revolving credit facility with up to $300 million in availability, plus an accordion feature that provides for an additional $100 million in availability, subject to certain conditions and lender commitments, in addition to its cash flow from operations. The situation surrounding COVID-19 remains fluid and there may be developments outside our control requiring us to adjust our operating plan. As such, given the dynamic nature of this situation, we are unable to predict the extent to which the pandemic and related impacts could impact our business operations, financial condition, results of operations, liquidity and cash flows. First Quarter Overview The Company’s operating revenue increased by 36.6 percent in the first quarter of 2022 compared to the same period in 2021. The increase resulted primarily from increases in revenue per shipment, tonnage and fuel surcharge revenue. Consolidated operating income was $103.4 million for the first quarter of 2022 compared to $48.7 million for the first quarter of 2021. In the first quarter of 2022, LTL shipments were up 5.7 percent per workday and LTL tonnage was up 9.5 percent per workday compared to the prior year quarter. Diluted earnings per share were $2.98 in the first quarter of 2022, compared to diluted earnings per share of $1.40 in the prior year quarter. The operating ratio (operating expenses divided by operating revenue) was 84.4 percent in the first quarter of 2022 compared to 89.9 percent in the first quarter of 2021. The improved operating ratio compared to prior year is due to the Company’s continued focus on pricing initiatives, cost control and operating efficiencies. The Company generated $96.0 million in net cash provided by operating activities in the first three months of 2022 compared with $61.0 million in the same period last year. The increase is primarily due to increased profitability partially offset by a change in working capital, largely increases in accounts receivable compared to prior year. The Company’s net cash used in investing activities was $45.4 million during the first three months of 2022 compared to $25.4 million in the first three months of 2021, primarily as a result of increased capital expenditures related to real estate acquisitions in the first three months of 2022. The Company’s net cash used in financing activities was $15.8 million in the first three months of 2022 compared to $7.6 million net cash used in financing activities during the same period last year. This change was primarily due to equity based compensation shares withheld for taxes as well as increased repayment of finance leases during the first three months of 2022. The Company had no outstanding borrowings under its revolving credit agreement, outstanding letters of credit of $33.8 million and a cash and cash equivalents balance of $141.3 million at March 31, 2022. The Company also had $44.9 million in obligations under finance leases at March 31, 2022. At March 31, 2022, the Company had $268.0 million in availability under the revolving credit facility. The revolving credit facility also has an accordion feature that allows for an additional $100 million availability, subject to certain conditions and availability of lender commitments. The Company was in compliance with the debt covenants under its revolving credit agreement at March 31, 2022. General The following Management’s Discussion and Analysis describes the principal factors affecting the results of operations, liquidity and capital resources, as well as the critical accounting policies and estimates of Saia, Inc. and its wholly-owned subsidiaries (together, the Company or Saia). Saia is a transportation company headquartered in Johns Creek, Georgia that provides national less-than-truckload (LTL) services through a single integrated organization. While more than 97 percent of revenue is derived from transporting LTL shipments across 45 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across North America. Our business is highly correlated to non-service sectors of the general economy. Our business also is impacted by a number of other factors as discussed under “Forward Looking Statements” and Part II, Item 1A. “Risk Factors.” The key factors that affect our operating results are the volumes of shipments transported through our network, as measured by our average daily shipments and tonnage; the prices we obtain for our services, as measured by revenue per hundredweight (a measure of yield) and revenue per shipment; our ability to manage our cost structure for capital expenditures and operating expenses such as salaries, wages and benefits; purchased transportation; claims and insurance expense; fuel and maintenance; and our ability to match operating costs to shifting volume levels. 14 Results of Operations Saia, Inc. and Subsidiaries Selected Results of Operations and Operating Statistics For the quarters ended March 31, 2022 and 2021 (unaudited) Percent Variance 2022 2021 '22 v. '21 (in thousands, except ratios, workdays, revenue per hundredweight, revenue per shipment and length of haul) Operating Revenue $ 661,216 $ 484,074 36.6 % Operating Expenses: Salaries, wages and employees’ benefits 289,463 244,437 18.4 Purchased transportation 78,248 45,031 73.8 Depreciation and amortization 39,952 35,372 12.9 Fuel and other operating expenses 150,104 110,520 35.8 Operating Income 103,449 48,714 112.4 Operating Ratio 84.4 % 89.9 % Nonoperating Expense 927 721 28.6 Working Capital (as of March 31, 2022 and 2021) 171,545 41,057 Cash Flows provided by Operating Activities (year to date) 95,961 60,971 Net Acquisitions of Property and Equipment (year to date) 45,376 25,388 Saia Motor Freight Operating Statistics: Workdays 64 63 1.6 LTL Tonnage 1,387 1,247 11.2 LTL Shipments 1,962 1,826 7.4 LTL Revenue per hundredweight $ 23.29 $ 19.18 21.4 LTL Revenue per shipment $ 329.30 $ 261.96 25.7 LTL Pounds per shipment 1,414 1,366 3.5 LTL Length of haul 915 904 1.2 Quarter ended March 31, 2022 compared to quarter ended March 31, 2021 Revenue and volume Consolidated revenue for the quarter ended March 31, 2022 increased 36.6 percent to $661.2 million primarily as a result of increased revenue per shipment, tonnage and fuel surcharge revenue. Saia’s LTL revenue per shipment increased 25.7 percent to $329.30 per shipment for the first quarter of 2022 as a result of changes in business mix and pricing actions. For the first quarter of 2022, Saia’s LTL tonnage was up 9.5 percent per workday to 1.4 million tons, and LTL shipments increased 5.7 percent per workday to 2.0 million shipments. For the first quarter of 2022, approximately 75 to 80 percent of Saia’s operating revenue was subject to specific customer price negotiations that occur throughout the year. The remaining 20 to 25 percent of operating revenue was subject to a general rate increase which is based on market conditions. For these customers subject to a general rate increase, on January 24, 2022 and January 18, 2021, Saia implemented 7.5 and 5.9 percent general rate increases, respectively. Competitive factors, customer turnover and mix changes, impact the extent to which customer rate increases are retained over time. Operating revenue includes fuel surcharge revenue from the Company’s fuel surcharge program. That program is designed to reduce the Company’s exposure to fluctuations in fuel prices by adjusting total freight charges to account for changes in the price of fuel. The Company’s fuel surcharge is based on the average national price for diesel fuel and is reset weekly. Fuel surcharges have remained in effect for several years, are widely accepted in the industry and are a significant component of revenue and pricing. Fuel surcharges are an integral part of customer contract negotiations but represent only one portion of overall customer price negotiations as customers may negotiate increases in base rates instead of increases in fuel surcharges or vice versa. Fuel surcharge revenue as a percentage of operating revenue increased to 16.8 percent for the quarter ended March 31, 2022 compared to 12.9 percent for the quarter ended March 31, 2021, as a result of increases in the cost of fuel. 15 Operating expenses and margin Consolidated operating income was $103.4 million in the first quarter of 2022 compared to $48.7 million in the prior year quarter. Overall, the increase in consolidated operating income in the first quarter of 2022 compared to the first quarter of 2021 was the result of increased tonnage, improved pricing actions, the impact of our fuel surcharge program and business mix management during the first quarter of 2022 . These actions in 2022 combined with the 9.5 percent increase in tonnage per day, along with continued focus on cost controls and operational efficiencies drove improvement during the quarter. The first quarter of 2022 operating ratio (operating expenses divided by operating revenue) was 84.4 percent compared to 89.9 percent for the same period in 2021. Salaries, wages and employees’ benefits increased $45.0 million in the first quarter of 2022 compared to the first quarter of 2021. This change was mostly caused by the Company having added headcount to support ongoing business growth and network expansion. In addition, in August 2021 the Company implemented a salary and wage increase of approximately 4.7 percent. Purchased transportation increased $33.2 million in the first quarter of 2022 compared to the first quarter of 2021 primarily due to linehaul capacity expansion to support growth and customer service requirements. In addition, the cost of this expanded capacity increased during the first quarter of 2022. Depreciation and amortization expense increased $4.6 million in the first quarter 2022 compared to the same period in 2021 primarily due to revenue equipment, real estate and technology investments in the second half of 2021 and the beginning of 2022. Fuel and other operating expenses and supplies increased $37.9 million in the first quarter of 2022 compared to the prior year quarter. This increase was driven primarily by an increase in fuel, operating expenses and supplies of $39.6 million, largely due to increasing diesel fuel costs and volume increases during the quarter. During the first quarter of 2022, claims and insurance expense was $0.7 million lower than the first quarter of 2021 primarily due to slightly lower claims activity overall. Other Substantially all non-operating expenses represent interest expense. Interest expense in the first quarter of 2022 was lower than the same period in 2021 as the Company continued to pay down finance lease obligations. The effective tax rate was 22.5 percent and 22.3 percent for the quarters ended March 31, 2022 and 2021, respectively. The increase in the first quarter effective tax rate in 2022 is primarily due to the reduction of available tax credits related to alternative fuels compared to the prior year, as alternative fuel tax credits have not been enacted for 2022. Net income was $79.4 million, or $2.98 per diluted share, in the first quarter of 2022 compared to net income of $37.3 million, or $1.40 per diluted share, in the first quarter of 2021. Working capital/capital expenditures Working capital at March 31, 2022 was $171.5 million, which increased from working capital at March 31, 2021 of $41.1 million. Current assets at March 31, 2022 increased by $162.4 million as compared to March 31, 2021 and includes an increase in accounts receivable of $79.4 million, and an increase in cash and cash equivalents of $88.1 million. Current liabilities increased by $31.9 million at March 31, 2022 compared to March 31, 2021 largely due to an increase in wages, vacation and employees’ benefits payable. Cash flows provided by operating activities were $96.0 million for the three months ended March 31, 2022 versus $61.0 million for the three months ended March 31, 2021. The increase is primarily due to increased profitability, partially offset by a change in working capital compared to prior year. For the three months ended March 31, 2022, net cash used in investing activities was $45.4 million versus $25.4 million in the same period last year, a $20.0 million increase. This increase resulted from increased capital expenditures related to real estate acquisitions as the Company continues to expand its footprint and add density in markets. The Company currently expects that net capital expenditures in 2022 will be in excess of $500 million. For the three months ended March 31, 2022, net cash used in financing activities was $15.8 million compared to $7.6 million net cash used in financing activities during the same period last year, as a result of equity based compensation shares withheld for taxes as well as increased repayments of finance leases during the first three months of 2022 as compared to the same period in 2021. 16 Outlook Our business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures, as well as the success of Company-specific improvement initiatives. Our outlook for 2022 is dependent on a number of external factors, including geopolitical developments, inflation, labor availability, fuel prices, supply chain and impact of pandemic related shut-downs. The potential impact of these factors on our operations, financial performance and financial condition, as well as the impact on our ability to successfully execute our business strategies and initiatives, remains uncertain and difficult to predict . We are continuing initiatives to improve and enhance customer service in an effort to support our ongoing pricing and business mix optimization, while controlling costs and improving productivity. On January 24, 2022 and January 18, 2021, Saia implemented a 7.5 and 5.9 percent general rate increase, respectively, for customers comprising approximately 20 to 25 percent of Saia’s operating revenue. The success of cost improvement initiatives is impacted by the cost and availability of drivers, dock workers and other employees and purchased transportation, fuel, self-insurance claims and insurance expense, regulatory changes, successful expansion of our service geography throughout the United States, the COVID-19 pandemic and other factors discussed under “Forward-Looking Statements” and Part II, Item 1A. “Risk Factors.” See “Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” for a more complete discussion of potential risks and uncertainties that could materially affect our future performance. Financial Condition, Liquidity and Capital Resources The Company’s liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements. The Company is party to a revolving credit agreement with a group of banks to fund capital investments, letters of credit and working capital needs. The Company has pledged certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement. Credit Agreement T he Company is a party to a Sixth Amended and Restated Credit Agreement with its banking group (the Amended Credit Agreement), which provides up to a $300 million revolving line of credit through February 2024. The Amended Credit Agreement also has an accordion feature that allows for an additional $100 million availability , subject to certain conditions and availability of lender commitments. The Amended Credit Agreement provides for a LIBOR rate margin range from 100 basis points to 200 basis points, base rate margins from minus 50 basis points to plus 50 basis points, an unused portion fee from 17.5 basis points to 30 basis points and letter of credit fees from 100 basis points to 200 basis points, in each case based on the Company’s leverage ratio. Under the Amended Credit Agreement, the Company must maintain a minimum debt service coverage ratio set at 1.25 to 1.00 and a maximum leverage ratio set at 3.25 to 1.00. The Amended Credit Agreement provides for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement. The Amended Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default. Under the Amended Credit Agreement, if an event of default occurs, the banks will be entitled to take various actions, including the acceleration of amounts due . At March 31, 2022, the Company had no outstanding borrowings and outstanding letters of credit of $32.0 million under the Amended Credit Agreement. At December 31, 2021, the Company had no outstanding borrowings and outstanding letters of credit of $29.3 million under the Amended Credit Agreement. The available portion of the Amended Credit Agreement may be used for general corporate purposes, including capital expenditures, working capital and letter of credit requirements as needed. Finance Leases The Company is obligated under finance leases with seven-year original terms covering revenue equipment. Total liabilities recognized under finance leases were $44.9 million and $50.4 million as of March 31, 2022 and December 31, 2021, respectively. Amortization of assets held under the finance leases is included in depreciation and amortization expense. The weighted average interest rates for the finance leases at March 31, 2022 and December 31, 2021 were 3.6 percent and 3.6 percent, respectively. 17 Cash Flows and Expenditures The Company has historically generated cash flows from operations to fund a large portion of its capital expenditure requirements. Cash flows from operating activities were $382.6 million for the year ended December 31, 2021, while net cash used in investing activities was $277.8 million. Cash flows provided by operating activities were $96.0 million for the three months ended March 31, 2022; $35.0 million higher than the first three months of the prior year. The increase in operating cash flows is primarily due to increased profitability, partially offset by a change in working capital, largely increases in accounts receivable compared to the prior year. The timing of capital expenditures can largely be managed around the seasonal working capital requirements of the Company. The Company believes it has significant sources of capital to meet short-term liquidity needs through its operating cash flows and availability under the Amended Credit Agreement. At March 31, 2022, the Company had $268.0 million in availability under the Amended Credit Agreement. The Company was in compliance with its debt covenants at March 31, 2022. Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals. Effective March 1, 2018, the Company entered into a new automobile liability insurance policy with a three-year term. Generally, the Company is responsible for the risk retention amount per occurrence of $2.0 million under the policy. Thereafter, the policy provides insurance coverage for a single loss of $8.0 million, an aggregate loss limit of $24.0 million for each policy year, and a $48.0 million aggregate loss limit for the 36-month term originally ended March 1, 2021. Under the policy, the Company could elect to commute the policy with respect to the first 12 months of the policy term and concurrently extend the policy for an additional one-year period if paid losses in the first 12 months of the policy were less than $5.2 million. In August 2019, the Company elected to commute the policy for such period. As a result, the Company received a return of $5.2 million of the premium paid (the maximum return premium available), based on the amount of claims paid and the insurer was released from all liability in connection with claims occurring in such 12-month period. The Company is now self-insured for the first $10 million per occurrence with respect to such 12-month period and the policy was extended for one additional year to March 1, 2022. The Company recognized the remaining $0.3 million of the return premium as a reduction in insurance premium expense in the first quarter of 2022 . Effective March 1, 2022, the Company extended the policy term for one additional year to March 1, 2023. Additionally, the Company is required to pay an additional premium of up to $11.0 million if losses paid by the insurer are greater than $17.5 million over the four-year policy period ending March 1, 2023. Based on claims occurring since March 1, 2019, no such additional premium was accrued at March 31, 2022 . Commencing on August 30, 2023, the Company may elect to commute the policy with respect to the insurer’s entire liability under the policy in which case the Company would be entitled to a return of a portion of the premium paid, up to $17.5 million , based on the amount of claims paid and the insurer would be released from all liability under the policy ending March 1, 2023. As a result, if the Company elects to commute the policy as to the entire policy term, the Company would be self-insured for $10 million per occurrence for the five years ended March 1, 2023. Effective March 1, 2022, the Company entered into an additional automobile liability insurance policy with a three-year term that is applicable when an occurrence exceeds $10 million. Thereafter, the policy provides insurance coverage for a single loss of an additional $5.0 million, an aggregate loss limit of $10.0 million for each policy year, and a $20.0 million aggregate loss limit for the three-year term ending March 1, 2025. Under the policy, the Company may elect to commute the policy for the three year term if losses incurred are less than $1.4 million and the Company does not elect to renew the policy. In the event the Company elects to commute the policy for such period, it will be entitled to a return of a portion of the premium paid, up to $1.1 million, based on the amount of claims paid and the insurer will be released from all liability in connection with such period. As a result, if the Company elects to commute the policy as to such period, the Company will be self-insured for the $10 million to $15 million loss layer per occurrence for the three years ended March 1, 2025. The decision whether to commute the policy can not be made before June 1, 2024 and must be made prior to December 1, 2025, unless the insurer agrees to extend such date. Additionally, the Company is required to pay an additional premium of up to $7.5 million if losses paid by the insurer are greater than $1.4 million over the three-year policy period ending March 1, 2025. Based on claims occurring since March 1, 2022, no such additional premium was accrued at March 31, 2022. Net capital expenditures pertain primarily to investments in tractors and trailers and other revenue equipment, information technology, land and structures. Projected net capital expenditures for 2022 are expected to be in excess of $500 million, which represents an increase from 2021 net capital expenditures of $277 million, inclusive of equipment acquired under finance leases, information technology, and land and structures. Projected 2022 capital expenditures include a normal replacement cycle of revenue equipment and technology investment for our operations. Net capital expenditures were $45.4 million in the first three months of 2022. Approximately $271.3 million of the 2022 remaining capital budget was committed as of March 31, 2022. Contractual Obligations Contractual obligations for the Company are comprised of lease agreements, purchase obligations and long-term debt obligations related to any outstanding balance under the Company’s revolving line of credit. Total contractual obligations for operating leases at March 31, 2022 totaled $123.8 million, including operating leases with original maturities of less than one year, which are not recorded in our consolidated balance sheet in accordance with U.S. generally accepted accounting principles. Additionally, in April 2021, the Company 18 committed to an additional terminal lease estimated to commence in 2023 of approximately $57 million with a lease term of 15 years with annual rent ranging from $3.1 million to $4.6 million. A nnual rental payments under this lease are not included in the contractual obligations for operating leases at March 31, 2022 . Contractual obligations in the form of finance leases were $47.4 million at March 31, 2022 , which include s both principal and interest components. See Note 5 to the accompanying condensed consolidated financial statements in this Current Report on Form 10-Q. The contractual finance lease obligation payments included here comprise both the principal and interest components. Purchase obligations at March 31, 2022 were $273.2 million , including commitments of $271.3 million for capital expenditures . As of March 31, 2022 , the revolving line of credit had no outstanding principal balance. Other commercial commitments of the Company typically include letters of credit and surety bonds required for collateral towards insurance agreements, and the outstanding available line of credit. As of March 31, 2022 the Company had total outstanding letters of credit of $33.8 million and $74.1 million in surety bonds. Additionally, the Company had $268.0 million available under its revolving credit facility, subject to existing debt covenants at March 31, 2022 . In addition to any principal amounts disclosed, the Company has interest obligations of approximately $2.6 million for the remainder of 2022, based on borrowings and commitments outstanding at March 31, 2022. The Company has accrued approximately $3.0 million for uncertain tax positions and $0.4 million for interest and penalties related to the uncertain tax positions as of March 31, 2022. At March 31, 2022, the Company has accrued $110.7 million for claims and insurance liabilities. Critical Accounting Policies and Estimates There have been no significant changes to the application of the critical accounting policies and estimates contained in our Form 10-K at December 31, 2021 . The reader should refer to the Notes to our Consolidated Financial Statements in our 2021 Annual Report on Form 10-K for a full disclosure of all critical accounting policies and estimates.