On January 7, 2019, In March 2020, we entered into an asset purchase agreement to acquire substantially allchanged the way we internally evaluate the operating performance of the assetsour business units and assume certain specified liabilitiesadopted a new segment reporting structure. As part of the affiliated entities of Cory 1st Choice Home Delivery (Cory), subject to customary closing conditions.  The closing of the transaction was effective on February 15, 2019, with a purchase price of $100 million. Total consideration paid in cash under the Cory agreement was $98.5 million and consisted of the agreed upon purchase price adjusted for estimated working capital adjustments. In addition,this new structure, we incurred approximately $2.9 million in transaction costs which are recorded in general and administrative expenses, net of asset dispositions in our Condensed Consolidated Statements of Earnings. The Cory acquisition was accounted for as a business combination and will operate withinseparated our Dedicated Contract Services® business segment. Assets acquired and liabilities assumed were recorded in our Condensed Consolidated Balance Sheet at their estimated fair values, as of the closing date, using cost, market data and valuation techniques that reflect management’s judgment and estimates. As a result of the acquisition, we recorded approximately $65.5 million of definite-lived intangible assets and approximately $28.4 million of goodwill. Goodwill consists of acquiring and retaining the Cory existing network and expected synergies from the combination of operations. The following table outlines the consideration transferred and preliminary purchase price allocation at their respective estimated fair values as of February 15, 2019 (in millions):

As discussed in Note 11, Acquisitions, in first quarter 2019, we recorded additional goodwill of approximately $28.4 million and additional finite-lived intangible assets of approximately $65.5 million in connection with the Cory acquisition. Total goodwill was $68.5 million and $40.1 million at March 31, 2019, and December 31, 2018, respectively. All goodwill is assigned to oursegment into two reportable segments: Dedicated Contract Services® business segmentServices and no impairment losses have been recorded for goodwill as of March 31, 2019. Prior to the Cory acquisition, our intangible assets consisted of those arising from a previous business acquisition and our purchased LDC network access, both within our Dedicated ContractFinal Mile Services® segment. Identifiable intangible assets consist of the following (in millions):

Our finite-lived intangible assets have no assigned residual values.

Intangible asset amortization expense was $2.2 million for the first quarter 2019 and 2018. Estimated amortization expense for our finite-lived intangible assets is expected to be approximately $12.8 million for 2019 and $14.2 million for 2020 through 2023. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment or accelerated amortization of intangible assets, and other events.

We. Accordingly, we reported four5 distinct business segments during the three months ended March 31, 2019 2020 and 2018.2019.  These segments included Intermodal (JBI), Dedicated Contract Services®Services (DCS), Integrated Capacity SolutionsSolutions™ (ICS), Final Mile Services (FMS) and Truckload (JBT). which are based primarily on the services each segment provides.  The operationJBI segment includes freight that is transported by rail over at least some portion of eachthe movement and also includes certain repositioning truck freight moved by JBI equipment or third-party carriers, when such highway movement is intended to direct JBI equipment back toward intermodal operations. DCS segment business includes company-owned and customer-owned, DCS-operated revenue equipment and employee drivers assigned to a specific customer, traffic lane, or service. DCS operations usually include formal, written longer-term agreements or contracts that govern services performed and applicable rates.  ICS provides non-asset and asset-light transportation solutions to customers through relationships with third-party carriers and integration with company-owned equipment. ICS services include flatbed, refrigerated, and LTL, as well as a variety of these businessesdry-van and intermodal solutions. FMS provides final-mile delivery services to customers through a nationwide network of cross-dock and other delivery system network locations. FMS provides both asset and non-asset big and bulky delivery and installation services, as well as fulfilment and retail-pooling distributions services. JBT business includes full-load, dry-van freight that is describedtransported utilizing company-owned revenue equipment or third-party carriers utilizing company-owned trailing equipment.  This freight is typically transported over roads and highways and does not move by rail. All transactions between reporting segments are eliminated in Note 13, Segment Information, of our Annual Report (Form 10-K) forconsolidation. Our customers are geographically dispersed across the year ended December 31, 2018.United States. A summary of certain segment information is presented below (in millions):

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should refer to the attached interim Condensed Consolidated Financial Statements and related notes and also to our Annual Report (Form 10-K) for the year ended December 31, 2018,2019, as you read the following discussion. We may make statements in this report that reflect our current expectation regarding future results of operations, performance, and achievements. These are “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995, and are based on our belief or interpretation of information currently available. You should realize there are many risks and uncertainties that could cause actual results to differ materially from those described. Some of the factors and events that are not within our control and could have a significant impact on future operating results are general economic and business conditions,conditions; competition and competitive rate fluctuations, cost and availability of diesel fuel, ability to attract and retain qualified drivers and delivery personnel,fluctuations; excess capacity in the intermodal or trucking industries; a loss of one or more major customers,customers; cost and availability of diesel fuel; interference with or termination of our relationships with certain railroads,railroads; rail service delays,delays; disruptions to U.S. port-of-call activity; ability to attract and retain qualified drivers, delivery personnel, independent contractors, and third-party carriers; retention of key employees; insurance costs and availability,availability; litigation and claims expense, retention of key employees, terrorist attacks or actions, acts of war, adverse weather conditions, disruption or failure of information systems,expense; determination that independent contractors are employees; new or different environmental or other laws and regulations,regulations; volatile financial credit markets or interest rates; terrorist attacks or actions; acts of war; adverse weather conditions; national or international health pandemics; disruption or failure of information systems; operational disruption or adverse effects of business acquisitions,acquisitions; increased costs for new revenue equipmentequipment; increased tariffs assessed on or disruptions in the procurement of imported revenue equipment; decreases in the value of used equipment,equipment; and the ability of revenue equipment manufacturers to perform in accordance with agreements for guaranteed equipment trade-in values. Additionally, our business is somewhat seasonal with slightly higher freight volumes typically experienced during August through early November in our full-load transportation business. You should also refer to Part I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2018,2019 and Part II, Item 1A of this Quarterly Report on Form 10-Q for additional information on risk factors and other events that are not within our control. Our future financial and operating results may fluctuate as a result of these and other risk factors as described from time to time in our filings with the SEC.

GENERAL

We are one of the largest surface transportation, delivery, and logistics companies in North America. We operate fourfive distinct, but complementary, business segments and provide a wide range of transportation and delivery services to a diverse group of customers throughout the continental United States, Canada, and Mexico. Our service offerings include transportation of full-truckload containerized freight, which we directly transport utilizing our company-controlled revenue equipment and company drivers or independent contractors. We have arrangements with most of the major North American rail carriers to transport freight in containers or trailers, while we perform the majority of the pickup and delivery services. We also provide customized freight movement, revenue equipment, labor, systems, and delivery services that are tailored to meet individual customers’ requirements and typically involve long-term contracts. These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local and home deliveries, freight handling, specialized equipment, and freight network design. Our local and home delivery services typically are provided through a network of cross-dock service centers throughout the continental United States. Utilizing a network of thousands of reliable third-party carriers, we also provide comprehensive transportation and logistics services. In addition to dry-van, full-load operations, these unrelated outside carriers also provide flatbed, refrigerated, less-than-truckload (LTL), and other specialized equipment, drivers, and services. Also, we utilize a combination of company-owned and contracted power units to provide traditional over-the-road full truckload delivery services. We account for our business on a calendar year basis, with our full year ending on December 31 and our quarterly reporting periods ending on March 31, June 30, and September 30. The operation of each of our fourfive business segments is described in Note 13, Segment Information, of10, Business Segments, in our AnnualCondensed Consolidated Financial Statements included in this Quarterly Report (Form 10-K) for the year ended December 31, 2018.on Form 10-Q.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that impact the amounts reported in our Condensed Consolidated Financial Statements and accompanying notes. Therefore, the reported amounts of assets, liabilities, revenues, expenses and associated disclosures of contingent liabilities are affected by these estimates. We evaluate these estimates on an ongoing basis, utilizing historical experience, consultation with experts, and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recognized in the accounting period in which the facts that give rise to the revision become known.

Information regarding our Critical Accounting Policies and Estimates can be found in our Annual Report (Form 10-K). The critical accounting policies that we believe require us to make more significant judgments and estimates when we prepare our financial statements include those relating to self-insurance accruals, revenue equipment, revenue recognition and income taxes. We have discussed the development and selection of these critical accounting policies and estimates with the Audit Committee of our Board of Directors. In addition, Note 2, Summary of Significant Accounting Policies, to the financial statements in our Annual Report (Form 10-K) for the year ended December 31, 2018,2019, contains a summary of our critical accounting policies. There have been no material changes to the methodology we apply for critical accounting estimates as previously disclosed in our Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Comparison of Three Months Ended March 31, 20120920 to Three Months Ended March 31, 201819

Total consolidated operating revenues increased to $2.09$2.28 billion for the first quarter 2019,2020, a 7%9% increase from $1.95$2.09 billion in the first quarter 2018,2019, and an 8%a 10% increase excluding fuel surcharge revenues. This increase in operating revenues was primarily due to an 11%driven by a 7% increase in revenue per load excluding fuel surcharges,volume in JBI, a 22%10% increase in revenues in DCS related to new customer contracts and rate increases,higher fleet utilization, a 15%2% increase in load volume and a favorable change in customer freight mix in ICS and a 10%3% increase in JBT revenue, primarily due to customer rate increases and a larger operating fleet compared15% increase in load volume. In addition, our newly reported FMS segment increased revenue 39% over the first quarter 2019, primarily due to the same periodtwo business acquisitions completed in 2018.2019. These overall increases were partially offset by a 7%1% decrease in JBI load volume and a 12% decrease in revenue per load and lower rates and changes in ICS.customer mix in JBT.

JBI segment revenue increased 2%6% to $1.09$1.15 billion during the first quarter 2019,2020, compared with $1.07$1.09 billion in 2018.2019. Load volumes during the first quarter 2019 decreased2020 increased 7% over the same period 2018.2019. Transcontinental loads declined 8%increased 11% during the first quarter 2019, while the2020, and Eastern network load volume was down 7%up 1% compared to the first quarter 2018. Approximately half of this decrease in volume is attributable to anticipated rail lane closures and persistent severe winter weather events in the Midwest region that impacted operations.2019. The 2%overall increase in revenueload volume was primarily due topartially offset by a 10% increase1% decrease in revenue per load, which is determined by the combination of customer rates, fuel surcharges and freight mix. Revenue per load excluding fuel surcharge revenue increased 11% year over year.was flat year-over-year. JBI reported improved year-over-year tractor and container utilization through the end of February 2020, as overall volume increases drove efficiencies in both the rail and dray network. Load volume disruptions related to the recent outbreak of the novel coronavirus (COVID-19) began to emerge in March and escalated through the end of the first quarter 2020. These load volume disruptions and resulting network imbalance could continue throughout the remainder of 2020, as a result of the overall economic effects caused by the ongoing COVID-19 pandemic. JBI segment operating income decreased 10%1%, to $103.3$102.2 million in the first quarter 2019,2020, from $114.2$103.3 million in 2018. Benefits from customer rate increases and freight mix were2019. The increase in revenue was more than offset by an increase in rail purchased transportation costs; reducedcosts, which included an $8.2 million accrual resulting from an adjusted calculation of the revenue divisions owed to BNSF Railway Company (BNSF) for 2019 related to the final award of our completed arbitration with BNSF issued in 2019; higher empty repositioning and network utilizationbalancing expenditures as network fluidity was challenged by the effects of COVID-19 during the quarter; higher personnel costs, primarily related to $4.0 million for a one-time COVID-19 related bonus paid to employee drivers and lowerother key field personnel; and higher costs for dray efficiency created from winter weather interruptions; higher equipment ownership and maintenance costs; and increased driver wages and recruiting costsrepositioning compared to the first quarter 2018.2019. The current period ended with approximately 95,80096,480 units of trailing capacity and 5,6715,492 power units assigned to the dray fleet.

DCS segment revenue increased 22%10% to $602$542 million in the first quarter 20192020 from $494$492 million in 2018.2019. Productivity, defined as revenue per truck per week, increased 6%2% when compared to 2018.2019. Productivity excluding fuel surcharges increased 4%3%, primarily due to customer rate increases, and better integration of assets between customer accounts, duringand increased customer supply chain fluidity largely attributed to a mild winter when compared to the first quarter of 2019 compared to 2018. In addition, the growth in DCS revenue includes an increase of $26 million in Final Mile Services (FMS) revenue compared to first quarter 2018.2019. A net additional 1,644430 revenue producing trucks were in the fleet by the end of the first quarter 20192020 compared to a year ago, primarily from private fleet conversions and growth in FMS induring the current and prior periods. As a result of the ongoing effects of the COVID-19 pandemic, the rate of newly awarded customer private fleet conversions, however, has slowed since late March and could remain slower during the remainder of 2020. DCS segment operating income increased 24%46% to $50.3$72.9 million in the first quarter 2019,2020, from $40.6$50.1 million in 2018. Increased revenue2019. The increase in operating income was partially offset bydue primarily to increased driver wagesfleet productivity and recruitingthe absence of any significant implementation or weather-related costs and higher facilities rent and costs to expand the FMS network,in first quarter 2020, compared to the first quarter 2018.2019. Operating income was partially offset by DCS’s $6.5 million portion of the one-time COVID-19 bonus paid in first quarter 2020.

ICS segment revenue increased 2%12% to $301$335 million in the first quarter 2019,2020, from $296$301 million in 2018.2019. Overall volumes increased 15%2% while revenue per load decreased 12%increased 9%, primarily due to customer freight mix changes and a lower spot pricing market when compared to first quarter 2018.2019. Contractual business represented approximately 68%74% of total load volume and 51%64% of total revenue in the first quarter 2019,2020, compared to 67%68% and 44%51%, respectively, in 2018.2019. Approximately $186$235 million of first quarter 20192020 ICS revenue was executed through the Marketplace for J.B. Hunt 360° compared to $96$186 million in the first quarter 2018.2019. ICS segment had an operating income decreased 22% to $7.0loss of $18.9 million in the first quarter 2019, from $8.9of 2020 compared to operating income of $7.0 million in 2018.2019. Gross profit margin increaseddecreased to 16.5%9.6% in the first quarter 2019,2020, compared to 14.4%16.5% in 2018,2019, primarily due to an adequatea competitive pricing environment in the contractual business and tightening supply of carrier capacity to accommodate customer demand duringdynamics at various points throughout the current period. Increased gross profit margin was more than offsetCurrent period operating results were further affected by continued personnel growth costs and increased technology spending as the Marketplace for J.B. Hunt 360° continues to expand in functionality and capacity.capacity, continued personnel growth costs, and higher digital marketing and advertising costs, compared to first quarter 2019. ICS’s carrier base increased 29%13% and employee count increased 18%2% compared to first quarter 2018.2019. ICS could experience reduced overall load volumes throughout the remainder of 2020 as a result of the economic effects caused by the ongoing COVID-19 pandemic.

       FMS segment revenue increased 39% to $154 million in the first quarter 2020 from $110 million in 2019, primarily due to two business acquisitions completed in 2019. Stop count for the first quarter 2020 increased 67%, while productivity, defined as revenue per stop, decreased 17% compared to 2019. The reduction in productivity was primarily due to a change in the mix of service methods to a more asset-light model resulting from the 2019 business acquisitions. FMS segment had an operating loss of $3.3 million in the first quarter of 2020 compared to operating income of $0.2 million in 2019. The current period operating loss was primarily due to increased costs to expand the FMS network, increased costs resulting from the temporary suspension of operations at several customer sites in response to COVID-19, higher bad debt expense, $1.3 million of one-time COVID-19 employee bonus expense, and $1.2 million in additional noncash amortization expense attributable to the 2019 business acquisitions compared to first quarter 2019. A large portion of FMS customers have been significantly impacted by the ongoing response to the COVID-19 pandemic and as a result, the operations of FMS will continue to be impacted as those customers’ operations are affected.

JBT segment revenue totaled $102$105 million for the first quarter 2019,2020, an increase of 10%3% from $93$102 million in first quarter 2018.2019. Revenue excluding fuel surcharge also increased 12%3% primarily from customer rate increases anddue to a 4%15% increase in load countvolume, partially offset by a 10% decrease in revenue per load compared to first quarter 2018. Load volume in the first quarter 2019 was negatively impacted by severe winter weather events in the Midwest region of operations.2019. Revenue per load excluding fuel surcharge increased 8%, primarily from a 12% increase in rates per loaded mile partially offset by a 4% decrease in length of haul whenfirst quarter 2020 decreased 6%, while comparable contractual customer rates decreased 1% compared to first quarter 2018.2019. As a result of the ongoing effects of the COVID-19 pandemic, JBT could experience reduced load volumes and customer rates throughout the remainder of 2020. At the end of the first quarter 2019,2020, JBT operated 1,887 tractors and 7,391 trailers compared to 2,043 tractors compared to 1,926and 6,785 trailers in 2018.2019. JBT segment operating income increased 41%decreased 75% to $7.2$1.8 million in 2019,2020, compared with $5.1$7.2 million during first quarter 2018.2019. Benefits from the higher revenue per load and lower equipment ownership costsvolume were partiallymore than offset by higher driverpurchased transportation expense, lower customer rates, increased trailing-related costs, higher technology modernization expenses, and independent contractor costs per mile and higher recruiting costs per driver and independent contractor$0.5 million of one-time COVID-19 employee bonus expense compared to first quarter 2018.2019.

Consolidated Operating Expenses

The following table sets forth items in our Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.

Total operating expenses increased 8.0%10.6%, while operating revenues increased 7.3%9.1%, during the first quarter 2019,2020, from the comparable period 2018.2019. Operating income decreased to $167.8$154.7 million during the first quarter 2019,2020, from $168.8$167.8 million in 2018.2019.

Rents and purchased transportation costs increased 3.6%13.6% in 2019.2020. This increase was primarily the result of increased third-party rail purchased transportation ratesthe increase in JBI and increased load volumes in ICS,volume, which increased services provided by third-party rail and truck carriers.carriers within JBI and ICS segments and increased rail and truck carrier purchased transportation rates. In addition, JBI rail purchased transportation costs included an $8.2 million accrual resulting from an adjusted calculation of the revenue divisions owed to BNSF for 2019 related to the final award of our completed arbitration with BNSF issued in 2019.

Salaries, wages and employee benefit costs increased 14.7%11.2% in 20192020 compared with 2018.2019. This increase was primarily related to increases in driver pay and office personnel compensation due to a tighter supply of qualified drivers and an increase in the number of employees. In addition, first quarter 2020 included a $12.3 million one-time COVID-19 related bonus paid to employee drivers and other key field personnel and $3.4 million of additional stock compensation expense related to the acceleration of equity award vesting for executive employee retirements.

Depreciation and amortization expense increased 13.6%8.5% in 2019,2020, primarily due to equipment purchases related to new DCS long-term customer contracts. Fuel costs increased 3.9%decreased 9.8% in 2019,2020, compared with 2018,2019, due to increased road miles, partially offset by a decrease in the price of fuel.fuel, partially offset by an increase in road miles.

Operating supplies and expenses increased 10.6%9.5% in 2019,2020, compared with 2018,2019, primarily due to higher equipment maintenancetoll costs, increased toll coststire expenses, and higher travelbuilding maintenance expenses. General and administrative expenses increased 39.3% for the current quarter from the comparable period in 2018,were virtually flat compared with 2019, primarily due to increased technology spend on the J.B. Hunt 360° platformbuilding and legacy system upgrades, higher FMS network facility costs, and increased advertising expenses.computer rentals being offset by a reduction in professional fees during first quarter 2020. Net loss from sale or disposal of assets was $2.3$1.5 million in 2019,2020, compared to a net loss of $2.8$2.3 million in 2018.2019. Insurance and claims expense increased 1.7%11.6% in 2019,2020, compared with 2018,2019, due to higher incident volume.volume, partially offset by a decrease in accident severity.

Net interest expense increased 42.4%decreased 7.7% in 2019,2020, due primarily to increased debt levels and higherlower effective interest rates on our debt. Income tax expense decreased 15.2%increased 7.7% in first quarter 2019,2020, compared with 2018,2019, primarily due to decreased taxable earnings and a lowerhigher effective income tax rate due to the impact of stock compensation accelerations for executive employee retirements and the fact that the effective rate for 2019 was reduced by the favorable settlement of a state income tax audit during the current period.audit. The increase in effective income tax rate was partially offset by decreased taxable earnings. Our effective income tax rate was 22.7%26.5% for the first quarter 2019,2020, compared to 26.0%22.7% in 2018.2019. Our annual tax rate for 20192020 is expected to be 24.0%24.5%. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

Liquidity and Capital Resources

Cash Flow

Net cash provided by operating activities totaled $251$249 million during the first three months of 2019,2020, compared with $262$251 million for the same period 2018.2019. Operating cash flows decreased due to decreased earnings in first quarter 2020, partially offset by the timing of general working capital activities. Net cash used in investing activities totaled $129 million in 2020, compared with $311 million in 2019, compared with $179 million in 2018.2019. The increasedecrease resulted from the purchase of Cory, which closed during first quarter 2019, and an increasea decrease in equipment purchases, net of proceeds from the sale of equipment, during the current period.period and from the fact that the Cory 1^st Choice Home Delivery acquisition closed during first quarter 2019. Net cash used in financing activities was $107 million in 2020, compared with net cash provided by financing activities wasof $105 million in 2019, compared with net cash used in financing activities of $90 million in 2018.2019. This change resulted primarily from first quarter 2020 including $75 million of treasury stock purchases, while first quarter 2019 included the issuance of our $700 million of 3.875% senior notes due March 2026, partially offset by the full retirement of our $250 million of 2.40% senior notes that matured in March 2019 and the pay down of our senior revolving line of credit to zero, during first quarter 2019.

Debt and Liquidity Data

Liquidity

Our need for capital has typically resulted from the acquisition of containers and chassis, trucks, tractors and trailers required to support our growth and the replacement of older equipment as well as periodic business acquisitions. We are frequently able to accelerate or postpone a portion of equipment replacements or other capital expenditures depending on market conditions.and overall economic conditions and will continue to utilize this ability throughout the ongoing COVID-19 pandemic. In the near-term, we are reprioritizing a portion of our 2020 capital spend to items we consider essential and critical. Expenditures are being evaluating based on those that must happen, those that can be deferred to a later period, and those that are capable of being canceled. We have, during the past few years, obtained capital through cash generated from operations, revolving lines of credit and long-term debt issuances. We have also periodically utilized operating leases to acquire revenue equipment.

We believe our liquid assets, cash generated from operations, and revolving line of credit will provide sufficient funds for our operating and capital requirements for the foreseeable future. Should COVID-19 related economic conditions warrant, we believe we have sufficient credit resources available to meet our near-term operating and capital needs. At March 31, 2020, we had a cash balance of $48 million and we had no outstanding balance on our revolving line of credit, which authorizes us to borrow up to $750 million as well as request an increase in the total commitment by up to $250 million.

Our financing arrangements require us to maintain certain covenants and financial ratios. At March 31, 2020, we were well above compliance with all covenants and financial ratios, and we fully intend and expect to emerge from the current COVID-19 related economic environment with our investment-grade rating intact.

We are continually evaluating the possible effects of current economic conditions and reasonable and supportable economic forecasts on operational cash flows, including the risks of declines in the overall freight market and our customers' liquidity and ability to pay. We are monitoring working capital on a daily basis and are in frequent communication with our customers, suppliers and service providers. Through March 31, 2020, operational cost reduction activities consisted primarily of canceling non-essential travel and hiring activities and the delay of other discretionary spending, which we will continue to do as necessary. A large portion of our cost structure is variable. Purchased transportation expense represents more than half of our total costs but is heavily tied to load volumes. Our second largest cost item is salaries and wages, the largest portion of which is driver pay, which includes a large variable component.  Currently, we have made no adjustments to our costs that we consider more fixed in nature. However, we are carefully monitoring the environment and are prepared to adjust if necessary.

The following table summarizes our expected obligations and commitments as of March 31, 20192020 (in millions):

Our net capital expenditures were approximately $212$129 million during the first three months of 2019,2020, compared with $179$212 million for the same period 2018.2019. Our net capital expenditures include net additions to revenue equipment and non-revenue producing assets that are necessary to contribute to and support the future growth of our various business segments. Capital expenditures in 20192020 were primarily for tractors, additional intermodal containers and chassis, and other trailing equipment. We are currently committed to spend approximately $278$903.2 million during 2019 and 2020.the years 2020 to 2022. We have paused or cancelled certain capital expenditures originally planned for 2020 that, considering the effects of the COVID-19 pandemic, are now viewed as non-essential in the near-term. Accordingly, we now expect to spend in the range of $410$450 million to $430$475 million for net capital expenditures during the remainder of 2019. On February 15, 2019, we completed2020. Our ultimate capital expenditure levels could also be affected by manufacturer production slowdowns resulting from the COVID-19 pandemic. We will also continue to evaluate opportunities for business acquisitions within our acquisition of substantially all of the assetsmarkets following our established evaluation process which considers liquidity and assumption of certain specified liabilities of the affiliated entities of Cory; see Note 11, Acquisitions, in our Condensed Consolidated Financial Statements. We used our existing revolving credit facility to finance this transaction and to provide any necessary liquidity for current and future operations. This acquisition did not have a material impact on our interest expense.funding requirements. The table above excludes $54.8$57.1 million of potential liabilities for uncertain tax positions, including interest and penalties, which are recorded on our Condensed Consolidated Balance Sheets. However, we are unable to reasonably estimate the ultimate timing of any settlements.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements, other than our net purchase commitments of $278903.2 million, as of March 31, 2019.2020.

Risk Factors

You should refer to Part I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2018,2019, and Part II, Item 1A of this Quarterly Report (Form 10-Q) under the caption “Risk Factors” for specific details on the following factors and events that are not within our control and could affect our financial results.

ITEM 3. Quantitative And Qualitative Disclosures AbouT Market Risk

Our outstanding debt at March 31, 20192020 includes our senior revolving line of credit and senior notes issuances. Our senior notes have fixed interest rates ranging from 3.30% to 3.875%. Our senior revolving line of credit has variable interest rates, which are based on the Prime Rate, the Federal Funds Rate, or LIBOR, depending upon the specific type of borrowing, plus any applicable margins. We currently have an interest rate swap agreement which effectively converts our $350 million of 3.30% fixed rate senior notes due August 2022 to a variable rate, to allow us to maintain a desired mix of variable and fixed rate debt. The applicable interest rate under this agreement is based on LIBOR plus an established margin. Risk can be quantified by measuring the financial impact of a near-term adverse increase in short-term interest rates. Our earnings would be affected by changes in these short-term variable interest rates. At our current level of borrowing, a one percentage point increase in our applicable rate would reduce annual pretax earnings by $3.5 million.

Although we conduct business in foreign countries, international operations are not material to our consolidated financial position, results of operations or cash flows. Additionally, foreign currency transaction gains and losses were not material to our results of operations for the three months ended March 31, 2019.2020. Accordingly, we are not currently subject to material foreign currency exchange rate risks from the effects that exchange rate movements of foreign currencies would have on our future costs or on future cash flows we would receive from our foreign investment. As of March 31, 2019,2020, we had no foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

The price and availability of diesel fuel are subject to fluctuations due to changes in the level of global oil production, seasonality, weather and other market factors. Historically, we have been able to recover a majority of fuel price increases from our customers in the form of fuel surcharges. We cannot predict the extent to which high fuel price levels may occur in the future, or the extent to which fuel surcharges could be collected to offset such increases. As of March 31, 2019,2020, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

ITEM 4. CONTROLS AND PROCEDURES

We maintain controls and procedures designed to ensure that the information we are required to disclose in the reports we file with the SEC is recorded, processed, summarized and reported, within the time periods specified in the SEC rules, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended).  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2019.2020.

There were no changes in our internal control over financial reporting during the first quarter of 20192020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

ITEM 1.     LEGAL PROCEEDINGS

We are a defendant in certain alleged class-action lawsuits in which the plaintiffs are current and former California-based employee drivers who allege claims for unpaid wages, failure to provide meal and rest periods, and other items. In the lead class-action, we reached an agreement and recorded a reserve in September 2018 to resolve all pending claims for a class settlement payment of $15 million, subject to Court approval. The United States District Court for the Central District of California entered an order granting final approval of the class settlement on April 23, 2019. We anticipate the overlapping class claims in the other alleged class-action lawsuits that have been stayed pending final approval of the class settlement in the lead class-action case will be dismissed.

In January 2017 we exercised our right to utilize the arbitration process to review the division of revenue collected beginning May 1, 2016, as well as to clarify other issues, under our Joint Service Agreement with BNSF Railway Company (BNSF). BNSF requested the same, and the arbitration process is on-going. In October 2018 we received the arbitrators’ Interim Award. The details of the Interim Award are confidential and require the parties to submit additional information requested by the arbitrators to decide certain unresolved matters. For the determined components of the Interim Award, we recorded an $18.3 million pre-tax charge in the third quarter 2018 related to certain charges claimed by BNSF for specific services requested for customers from April 2014 through May 2018. In December 2018 the arbitrators’ issued their Clarified Interim Award of October 2018 resulting from some of the parties’ additional submissions to the Panel regarding certain issues related to determining the revenue division between the parties. In January 2019 the Panel issued its Second Interim Award ordering that $89.4 million is due from the Company to BNSF resulting from the adjusted revenue divisions relating to the 2016 period at issue ($52.1 million) and for calendar year 2017 ($37.3 million). The parties have made further submissions on the revenue divisions for calendar year 2018 and going forward, as well as other confidential issues raised during the arbitration process so that the panel can issue an appropriate interim and/or final award regarding all issues raised during the proceeding. We recorded pretax charges for contingent liabilities in the fourth quarter 2018 of $89.4 million claimed by the BNSF for the period May 1, 2016 through December 31, 2017 and $44.6 million for the period January 1, 2018 through December 31, 2018, for a total of $134 million.

The other financial implications from the Interim Award and the Clarified Interim Award will not be fully determined until the arbitrators issue additional award(s) following their review of each party’s requested additional submissions. At this time, we are unable to reasonably predict the final outcome of the arbitration, and, as such, no further gain or loss contingency can be determined or recorded. If decided adversely, this matter could result in a liability material to our financial condition or results of operations. BNSF provides a significant amount of rail transportation services to our JBI business segment. Normal commercial business activity between the parties, including load tendering, load tracing, billing and payments, is expected to continue on a timely basis.

We are involved in certain other claims and pending litigation arising from the normal conduct of business. Based on present knowledge of the facts and, in certain cases, opinions of outside counsel, we believe the resolution of these claims and pending litigation will not have a material adverse effect on our financial condition, results of operations or liquidity.

ITEM 1A.    RISK FACTORS