10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-21238

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware	06-1313069
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

13410 Sutton Park Drive South, Jacksonville, Florida

(Address of principal executive offices)

32224

(Zip Code)

(904) 398-9400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LSTR	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of the close of business on October 17, 2022 was 35,925,265.

Index

PART I – Financial Information

Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of September 24, 2022 and December 25, 2021	Page 4
Consolidated Statements of Income for the Thirty Nine and Thirteen Weeks Ended September 24, 2022 and September 25, 2021	Page 5
Consolidated Statements of Comprehensive Income for the Thirty Nine and Thirteen Weeks Ended September 24, 2022 and September 25, 2021	Page 6
Consolidated Statements of Cash Flows for the Thirty Nine Weeks Ended September 24, 2022 and September 25, 2021	Page 7
Consolidated Statements of Changes in Shareholders’ Equity for the Thirty Nine and Thirteen Weeks Ended September 24, 2022 and September 25, 2021	Page 8
Notes to Consolidated Financial Statements	Page 10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	Page 32
Item 4. Controls and Procedures	Page 33
PART II – Other Information
Item 1. Legal Proceedings	Page 33
Item 1A. Risk Factors	Page 33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	Page 34
Item 6. Exhibits	Page 34
Signatures	Page 36
EX – 31.1 Section 302 CEO Certification
EX – 31.2 Section 302 CFO Certification
EX – 32.1 Section 906 CEO Certification
EX – 32.2 Section 906 CFO Certification

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The interim consolidated financial statements contained herein reflect all adjustments (all of a normal, recurring nature) which, in the opinion of management, are necessary for a fair statement of the financial condition, results of operations, cash flows and changes in shareholders’ equity for the periods presented. They have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the thirty nine weeks ended September 24, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2022.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K.

3

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)

	September 24, 2022			December 25, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	177,796		$	215,522
Short-term investments		50,637			35,778
Trade accounts receivable, less allowance of $10,464 and $7,074		1,133,681			1,154,314
Other receivables, including advances to independent contractors, less allowance of $9,877 and $8,125		87,241			101,124
Other current assets		35,493			16,162
Total current assets		1,484,848			1,522,900
Operating property, less accumulated depreciation and amortization of $383,458 and $344,099		321,585			317,386
Goodwill		41,004			40,768
Other assets		141,103			164,411
Total assets	$	1,988,540		$	2,045,465
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Cash overdraft	$	97,686		$	116,478
Accounts payable		644,054			604,130
Current maturities of long-term debt		37,375			36,561
Insurance claims		58,131			46,896
Dividends payable		—			75,387
Other current liabilities		104,272			130,531
Total current liabilities		941,518			1,009,983
Long-term debt, excluding current maturities		72,095			75,243
Insurance claims		55,765			49,509
Deferred income taxes and other noncurrent liabilities		45,989			48,720
Shareholders’ Equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,380,565 and 68,232,975 shares		684			682
Additional paid-in capital		255,486			255,148
Retained earnings		2,625,290			2,317,184
Cost of 32,455,300 and 30,539,235 shares of common stock in treasury		(1,992,886	)		(1,705,601	)
Accumulated other comprehensive loss		(15,401	)		(5,403	)
Total shareholders’ equity		873,173			862,010
Total liabilities and shareholders’ equity	$	1,988,540		$	2,045,465

See accompanying notes to consolidated financial statements.

4

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Revenue	$	5,761,795	$	4,592,551	$	1,816,132	$	1,734,299
Investment income		2,023		2,138		716		706
Costs and expenses:
Purchased transportation		4,512,341		3,583,197		1,416,323		1,356,671
Commissions to agents		465,759		356,997		154,125		135,295
Other operating costs, net of gains on asset sales/dispositions		34,878		27,117		13,356		10,572
Insurance and claims		96,265		75,198		31,445		29,569
Selling, general and administrative		165,199		158,720		53,519		59,198
Depreciation and amortization		42,627		36,532		14,582		12,288
Total costs and expenses		5,317,069		4,237,761		1,683,350		1,603,593
Operating income		446,749		356,928		133,498		131,412
Interest and debt expense		3,275		2,974		1,047		965
Income before income taxes		443,474		353,954		132,451		130,447
Income taxes		105,862		85,745		32,233		31,772
Net income	$	337,612	$	268,209	$	100,218	$	98,675
Diluted earnings per share	$	9.15	$	7.00	$	2.76	$	2.58
Average diluted shares outstanding		36,886,000		38,342,000		36,334,000		38,218,000
Dividends per common share	$	0.80	$	0.67	$	0.30	$	0.25

See accompanying notes to consolidated financial statements.

5

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Net income	$	337,612		$	268,209		$	100,218		$	98,675
Other comprehensive (loss) income:
Unrealized holding losses on available-for-sale investments, net of tax benefit of $2,461, $347, $436 and $104		(8,987	)		(1,260	)		(1,596	)		(377	)
Foreign currency translation (losses) gains		(1,011	)		320			(1,484	)		(710	)
Other comprehensive loss		(9,998	)		(940	)		(3,080	)		(1,087	)
Comprehensive income	$	327,614		$	267,269		$	97,138		$	97,588

See accompanying notes to consolidated financial statements.

6

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Thirty Nine Weeks Ended
	September 24, 2022			September 25, 2021
OPERATING ACTIVITIES
Net income	$	337,612		$	268,209
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		42,627			36,532
Non-cash interest charges		290			336
Provisions for losses on trade and other accounts receivable		8,346			3,884
Gains on sales/disposals of operating property		(1,290	)		(1,259	)
Deferred income taxes, net		(2,597	)		4,948
Stock-based compensation		9,409			18,717
Changes in operating assets and liabilities:
Decrease (increase) in trade and other accounts receivable		26,170			(224,503	)
Increase in other assets		(17,669	)		(3,822	)
Increase in accounts payable		39,924			167,880
(Decrease) increase in other liabilities		(23,932	)		22,837
Increase (decrease) in insurance claims		17,491			(76,769	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		436,381			216,990
INVESTING ACTIVITIES
Sales and maturities of investments		27,568			25,521
Purchases of investments		(30,490	)		(77,649	)
Purchases of operating property		(21,096	)		(18,561	)
Proceeds from sales of operating property		2,669			2,047
Purchase of non-marketable securities		(4,999	)		—
NET CASH USED BY INVESTING ACTIVITIES		(26,348	)		(68,642	)
FINANCING ACTIVITIES
(Decrease) increase in cash overdraft		(18,792	)		14,210
Dividends paid		(104,893	)		(102,463	)
Payment for debt issue costs		(1,080	)		—
Proceeds from exercises of stock options		56			134
Taxes paid in lieu of shares issued related to stock-based compensation plans		(10,427	)		(2,342	)
Purchases of common stock		(285,983	)		(50,230	)
Principal payments on finance lease obligations		(29,075	)		(26,513	)
Payment of deferred consideration		—			(168	)
NET CASH USED BY FINANCING ACTIVITIES		(450,194	)		(167,372	)
Effect of exchange rate changes on cash and cash equivalents		(1,614	)		234
Decrease in cash, cash equivalents and restricted cash		(41,775	)		(18,790	)
Cash, cash equivalents and restricted cash at beginning of period		219,571			249,354
Cash and cash equivalents at end of period	$	177,796		$	230,564

See accompanying notes to consolidated financial statements.

7

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Thirty Nine and Thirteen Weeks Ended September 24, 2022 and September 25, 2021

(Dollars in thousands)

(Unaudited)

	Common Stock				Additional Paid-In			Retained			Treasury Stock at Cost					Accumulated Other Comprehensive
	Shares		Amount		Capital			Earnings			Shares		Amount			Loss			Total
Balance December 25, 2021		68,232,975	$	682	$	255,148		$	2,317,184			30,539,235	$	(1,705,601	)	$	(5,403	)	$	862,010
Net income									124,839											124,839
Dividends ($0.25 per share)									(9,324	)										(9,324	)
Purchases of common stock												693,550		(109,332	)					(109,332	)
Issuance of stock related to stock- based compensation plans		137,176		2		(8,913	)					10,033		(1,216	)					(10,127	)
Stock-based compensation						1,995														1,995
Other comprehensive loss																	(3,912	)		(3,912	)
Balance March 26, 2022		68,370,151	$	684	$	248,230		$	2,432,699			31,242,818	$	(1,816,149	)	$	(9,315	)	$	856,149
Net income									112,555											112,555
Dividends ($0.25 per share)									(9,257	)										(9,257	)
Purchases of common stock												703,211		(103,300	)					(103,300	)
Issuance of stock related to stock- based compensation plans		6,783		—		—						587		(86	)					(86	)
Stock-based compensation						3,815														3,815
Other comprehensive loss																	(3,006	)		(3,006	)
Balance June 25, 2022		68,376,934	$	684	$	252,045		$	2,535,997			31,946,616	$	(1,919,535	)	$	(12,321	)	$	856,870
Net income									100,218											100,218
Dividends ($0.30 per share)									(10,925	)										(10,925	)
Purchases of common stock												504,065		(73,351	)					(73,351	)
Issuance of stock related to stock- based compensation plans		3,631		—		(158	)					4,619		—						(158	)
Stock-based compensation						3,599														3,599
Other comprehensive loss																	(3,080	)		(3,080	)
Balance September 24, 2022		68,380,565	$	684	$	255,486		$	2,625,290			32,455,300	$	(1,992,886	)	$	(15,401	)	$	873,173

8

	Common Stock				Additional Paid-In			Retained			Treasury Stock at Cost					Accumulated Other Comprehensive
	Shares		Amount		Capital			Earnings			Shares		Amount			(Loss) Income			Total
Balance December 26, 2020		68,183,702	$	682	$	228,875		$	2,046,238			29,797,639	$	(1,581,961	)	$	(1,999	)	$	691,835
Net income									77,240											77,240
Dividends ($0.21 per share)									(8,067	)										(8,067	)
Issuance of stock related to stock-based compensation plans		28,594		—		(307	)					6,087		(857	)					(1,164	)
Stock-based compensation						4,029														4,029
Other comprehensive loss																	(954	)		(954	)
Balance March 27, 2021		68,212,296	$	682	$	232,597		$	2,115,411			29,803,726	$	(1,582,818	)	$	(2,953	)	$	762,919
Net income									92,294											92,294
Dividends ($0.21 per share)									(8,068	)										(8,068	)
Purchases of common stock												150,000		(23,837	)					(23,837	)
Issuance of stock related to stock-based compensation plans		17,584		—		(1,039	)					355		(61	)					(1,100	)
Stock-based compensation						6,864														6,864
Other comprehensive income																	1,101			1,101
Balance June 26, 2021		68,229,880	$	682	$	238,422		$	2,199,637			29,954,081	$	(1,606,716	)	$	(1,852	)	$	830,173
Net income									98,675											98,675
Dividends ($0.25 per share)									(9,558	)										(9,558	)
Purchases of common stock												167,046		(26,393	)					(26,393	)
Issuance of stock related to stock-based compensation plans		1,133		—		56						1,300		—						56
Stock-based compensation						7,824														7,824
Other comprehensive loss																	(1,087	)		(1,087	)
Balance September 25, 2021		68,231,013	$	682	$	246,302		$	2,288,754			30,122,427	$	(1,633,109	)	$	(2,939	)	$	899,690

See accompanying notes to consolidated financial statements.

9

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The consolidated financial statements include the accounts of Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc., and reflect all adjustments (all of a normal, recurring nature) which are, in the opinion of management, necessary for a fair statement of the results for the periods presented. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates. Landstar System, Inc. and its subsidiary are herein referred to as “Landstar” or the “Company.” Significant intercompany accounts have been eliminated in consolidation.

(1) Significant Accounting Policies

Revenue from Contracts with Customers – Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers generated by equipment type during the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021 (dollars in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
Mode	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Truck – BCO Independent Contractors		35	%		41	%		35	%		40	%
Truck – Truck Brokerage Carriers		53	%		50	%		53	%		51	%
Rail intermodal		2	%		3	%		2	%		3	%
Ocean and air cargo carriers		8	%		4	%		9	%		5	%
Truck Equipment Type
Van equipment	$	3,022,297		$	2,502,025		$	914,154		$	918,115
Unsided/platform equipment	$	1,336,956		$	1,112,358		$	453,924		$	422,979
Less-than-truckload	$	105,994		$	85,551		$	35,343		$	30,819
Other truck transportation (1)	$	632,001		$	518,472		$	195,345		$	208,817

(1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

10

(2) Share-based Payment Arrangements

As of September 24, 2022, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”). The Company also has a stock compensation plan for members of its Board of Directors, the 2022 Directors Stock Compensation Plan (the “2022 DSCP”), which replaced the Amended and Restated 2013 Directors Stock Compensation Plan (as amended and restated, the “2013 DSCP”). At the Company’s 2022 Annual Meeting of Stockholders held on May 11, 2022, the Company’s stockholders approved the 2022 DSCP. The provisions of the 2022 DSCP are substantially similar to the provisions of the 2013 DSCP. 6,000,000 shares of the Company’s common stock were authorized for issuance under the 2011 EIP, and 200,000 shares of the Company’s common stock were authorized for issuance under the 2022 DSCP. No further grants can be made under the 2013 DSCP, including 56,502 shares of the Company’s common stock previously reserved for issuance, but not issued, under the 2013 DSCP. The 2011 EIP, 2013 DSCP and 2022 DSCP are each referred to herein as a “Plan,” and, collectively, as the “Plans.” Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Total cost of the Plans during the period	$	9,409		$	18,717		$	3,599		$	7,824
Amount of related income tax benefit recognized during the period		(5,219	)		(5,636	)		(949	)		(1,919	)
Net cost of the Plans during the period	$	4,190		$	13,081		$	2,650		$	5,905

Included in income tax benefits recognized in the thirty-nine-week periods ended September 24, 2022 and September 25, 2021 were excess tax benefits from stock-based awards of $2,910,000 and $1,039,000 respectively.

As of September 24, 2022, there were 193,217 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 3,245,251 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

The following table summarizes information regarding the Company’s outstanding restricted stock unit (“RSU”) awards with either a performance condition or a market condition under the Plans:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding at December 25, 2021		209,399		$	102.90
Granted		49,825		$	139.54
Shares earned in excess of target (1)		91,497		$	92.58
Vested shares, including shares earned in excess of target		(177,146	)	$	95.48
Forfeited		(21,989	)	$	113.85
Outstanding at September 24, 2022		151,586		$	115.80

(1) Represents additional shares earned under each of the February 2, 2017, February 2, 2018 and February 1, 2019 RSU awards, as fiscal year 2021 financial results exceeded target performance level under each such award.

During the thirty-nine-week period ended September 24, 2022, the Company granted RSUs with a performance condition. Outstanding RSUs at both December 25, 2021 and September 24, 2022 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2021 Annual Report on Form 10-K.

RSUs with a performance condition granted on January 28, 2022 may vest on January 31 of 2025, 2026 and 2027 based on growth in operating income and pre-tax income per diluted share from continuing operations as compared to the results from the 2021 fiscal year.

The Company recognized approximately $7,035,000 and $16,223,000 of share-based compensation expense related to RSU awards in the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, respectively. As of September 24, 2022, there was a maximum of $19.7 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.6 years. With respect to RSU awards with a performance condition, the amount of future compensation expense to be recognized will be determined based on future operating results.

11

Non-vested Restricted Stock and Deferred Stock Units

The following table summarizes information regarding the Company’s outstanding shares of non-vested restricted stock and Deferred Stock Units (defined below) under the Plans:

	Number of Shares and Deferred Stock Units			Weighted Average Grant Date Fair Value
Non-vested at December 25, 2021		56,436		$	125.16
Granted		25,354		$	152.54
Vested		(27,074	)	$	122.68
Forfeited		(6,921	)	$	144.45
Non-vested at September 24, 2022		47,795		$	138.30

The fair value of each share of non-vested restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant. Shares of non-vested restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100% on the first or fifth anniversary of the date of the grant. For restricted stock awards granted under the 2022 DSCP, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of recipient separation from service from the Board of Directors, or, if earlier, upon a change in control event of the Company. Deferred Stock Units become vested 100% on the first anniversary of the date of the grant. Deferred Stock Units do not represent actual ownership in shares of the Company’s common stock and the recipient does not have voting rights or other incidents of ownership until the shares are issued. However, Deferred Stock Units do contain the right to receive dividend equivalent payments prior to settlement into shares.

As of September 24, 2022, there was $4,375,000 of total unrecognized compensation cost related to non-vested shares of restricted stock and Deferred Stock Units granted under the Plans. The unrecognized compensation cost related to these non-vested shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 1.9 years.

Stock Options

The following table summarizes information regarding the Company’s outstanding stock options under the Plans:

	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (000s)
Options outstanding at December 25, 2021		8,570		$	55.42
Exercised		(4,100	)	$	54.36
Options outstanding at September 24, 2022		4,470		$	56.40		0.4	$	386
Options exercisable at September 24, 2022		4,470		$	56.40		0.4	$	386

The total intrinsic value of stock options exercised during the thirty-nine-week periods ended September 24, 2022 and September 25, 2021 was $429,000 and $644,000, respectively.

As of September 24, 2022, there was no unrecognized compensation cost related to stock options granted under the Plans.

(3) Income Taxes

The provisions for income taxes for the 2022 and 2021 thirty-nine-week periods were based on estimated annual effective income tax rates of 24.5% and 24.4%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The estimated annual effective income tax rate was higher than the statutory federal income tax rate of 21% in both periods primarily attributable to state taxes and non-deductible executive compensation. The effective income tax rate for the 2022 thirty-nine-week period was 23.9%, which was lower than the estimated annual effective income tax rate of 24.5%, primarily attributable to excess tax benefits realized on stock-based awards. The effective income tax rate for the 2021 thirty-nine-week period was 24.2%, which was lower than the estimated annual effective income tax rate of 24.4% primarily attributable to excess tax benefits realized on stock-based awards.

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(4) Earnings Per Share

Earnings per common share are based on the weighted average number of shares outstanding, including outstanding non-vested restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares and Deferred Stock Units outstanding plus the incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options. During the 2022 and 2021 thirty-nine-week and thirteen-week periods, in reference to the determination of diluted earnings per share, the future compensation cost attributable to outstanding shares of non-vested restricted stock exceeded the impact of incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options.

For each of the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, no options outstanding to purchase shares of common stock were antidilutive. Outstanding RSUs were excluded from the calculation of diluted earnings per share for all periods because the performance metric requirements or market condition for vesting had not been satisfied.

(5) Additional Cash Flow Information

During the 2022 thirty-nine-week period, Landstar paid income taxes and interest of $125,690,000 and $3,101,000, respectively. During the 2021 thirty-nine-week period, Landstar paid income taxes and interest of $71,823,000 and $2,780,000, respectively. Landstar acquired operating property by entering into finance leases in the amount of $26,741,000 and $23,080,000 in the 2022 and 2021 thirty-nine-week periods, respectively.

(6) Segment Information

The following table summarizes information about the Company’s reportable business segments as of and for the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021:

	Thirty Nine Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	5,702,959	$	58,836	$	5,761,795	$	4,539,561	$	52,990	$	4,592,551
Internal revenue				65,753		65,753				53,028		53,028
Investment income				2,023		2,023				2,138		2,138
Operating income		412,054		34,695		446,749		323,370		33,558		356,928
Expenditures on long-lived assets		21,096				21,096		18,561				18,561
Goodwill		41,004				41,004		40,980				40,980
	Thirteen Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	1,796,401	$	19,731	$	1,816,132	$	1,716,004	$	18,295	$	1,734,299
Internal revenue				12,883		12,883				9,533		9,533
Investment income				716		716				706		706
Operating income		120,164		13,334		133,498		123,410		8,002		131,412
Expenditures on long-lived assets		13,629				13,629		9,561				9,561

In the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, no single customer accounted for more than 10% of the Company’s consolidated revenue.

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(7) Other Comprehensive Income

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the thirty-nine-week period ended September 24, 2022 (in thousands):

	Unrealized Holding Gains (Losses) on Available-for-Sale Securities			Foreign Currency Translation			Total
Balance as of December 25, 2021	$	113		$	(5,516	)	$	(5,403	)
Other comprehensive loss		(8,987	)		(1,011	)		(9,998	)
Balance as of September 24, 2022	$	(8,874	)	$	(6,527	)	$	(15,401	)

Amounts reclassified from accumulated other comprehensive income to investment income due to the realization of previously unrealized gains and losses in the accompanying consolidated statements of income were not significant for the thirty-nine-week period ended September 24, 2022.

(8) Investments

Investments include primarily investment-grade corporate bonds and asset-backed securities having maturities of up to five years (the “bond portfolio”) and money market investments. Investments in the bond portfolio are reported as available-for-sale and are carried at fair value. Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets. Management performs an analysis of the nature of the unrealized losses on available-for-sale investments to determine whether an allowance for credit loss is necessary. Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of noncredit-related factors are to be included as a component of shareholders’ equity. Investments whose values are based on quoted market prices in active markets are classified within Level 1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Any transfers between levels are recognized as of the beginning of any reporting period. Fair value of the bond portfolio was determined using Level 1 inputs related to U.S. Treasury obligations and money market investments and Level 2 inputs related to investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies. Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $11,304,000 at September 24, 2022, while unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $144,000 at December 25, 2021.

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The amortized cost and fair values of available-for-sale investments are as follows at September 24, 2022 and December 25, 2021 (in thousands):    

			Gross		Gross
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 24, 2022
Money market investments	$	22,062	$	—	$	—	$	22,062
Asset-backed securities		19,742		—		2,666		17,076
Corporate bonds and direct obligations of government agencies		129,250		—		8,536		120,714
U.S. Treasury obligations		2,344		—		102		2,242
Total	$	173,398	$	—	$	11,304	$	162,094
December 25, 2021
Money market investments	$	8,750	$	—	$	—	$	8,750
Asset-backed securities		22,441		—		346		22,095
Corporate bonds and direct obligations of government agencies		137,916		1,406		966		138,356
U.S. Treasury obligations		2,342		50		—		2,392
Total	$	171,449	$	1,456	$	1,312	$	171,593

For those available-for-sale investments with unrealized losses at September 24, 2022 and December 25, 2021, the following table summarizes the duration of the unrealized loss (in thousands):

	Less than 12 months				12 months or longer						Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
September 24, 2022
Asset-backed securities	$	3,224	$	453	$	13,852	$	2,213	$	17,076	$	2,666
Corporate bonds and direct obligations of government agencies		68,854		2,732		51,860		5,804		120,714		8,536
U.S. Treasury obligations		2,242		102		—		—		2,242		102
Total	$	74,320	$	3,287	$	65,712	$	8,017	$	140,032	$	11,304
December 25, 2021
Asset-backed securities	$	22,095	$	346	$	—	$	—	$	22,095	$	346
Corporate bonds and direct obligations of government agencies		72,526		966		—		—		72,526		966
Total	$	94,621	$	1,312	$	—	$	—	$	94,621	$	1,312

The Company believes unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality. The Company expects to recover, through collection of all of the contractual cash flows of each security, the amortized cost basis of these securities as it does not intend to sell, and does not anticipate being required to sell, these securities before recovery of the cost basis. For these reasons, no losses have been recognized in the Company’s consolidated statements of income.

(9) Leases

Landstar’s noncancelable leases are primarily comprised of finance leases for the acquisition of new trailing equipment. Each finance lease for the acquisition of trailing equipment is a five year lease with a $1 purchase option for the applicable equipment at lease expiration. Substantially all of Landstar’s operating lease right-of-use assets and operating lease liabilities represent leases for facilities maintained in support of the Company’s network of BCO Independent Contractors and office space used to conduct Landstar’s business.

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These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further, the leases do not contain contingent rent provisions. Landstar also rents certain trailing equipment to supplement the Company-owned trailer fleet under “month-to-month” lease terms, which are not required to be recorded on the balance sheet due to the less than twelve month lease term exemption. Sublease income is primarily comprised of weekly trailing equipment rentals to BCO Independent Contractors.

Most of Landstar’s operating leases include one or more options to renew. The exercise of lease renewal options is typically at Landstar’s sole discretion, and, as such, the majority of renewals to extend the lease terms are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. Landstar regularly evaluates the renewal options, and when they are reasonably certain of exercise, Landstar includes the renewal period in the lease term.

As most of Landstar’s operating leases do not provide an implicit rate, Landstar utilized its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. Landstar has a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, the Company applies a portfolio approach for determining the incremental borrowing rate.

The components of lease cost for finance leases and operating leases for the thirty nine weeks ended September 24, 2022 were (in thousands):

Finance leases:
Amortization of right-of-use assets	$	16,455
Interest on lease liability		2,117
Total finance lease cost		18,572
Operating leases:
Lease cost		2,587
Variable lease cost		—
Sublease income		(3,711	)
Total net operating lease income		(1,124	)
Total net lease cost	$	17,448

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A summary of the lease classification on our consolidated balance sheet as of September 24, 2022 is as follows (in thousands):

Assets:

Operating lease right-of-use assets	Other assets	$	1,628
Finance lease assets	Operating property, less accumulated depreciation and amortization		146,903
Total lease assets		$	148,531

Liabilities:

The following table reconciles the undiscounted cash flows for the finance and operating leases to the finance and operating lease liabilities recorded on the balance sheet at September 24, 2022 (in thousands):

	Finance Leases		Operating Leases
2022 Remainder	$	10,680	$	194
2023		37,822		705
2024		27,969		542
2025		21,771		285
2026		13,633		—
Thereafter		3,214		—
Total future minimum lease payments		115,089		1,726
Less amount representing interest (1.6% to 4.6%)		5,619		98
Present value of minimum lease payments	$	109,470	$	1,628
Current maturities of long-term debt		37,375
Long-term debt, excluding current maturities		72,095
Other current liabilities				715
Deferred income taxes and other noncurrent liabilities				913

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of September 24, 2022 were:

	Finance Leases			Operating Leases
Weighted average remaining lease term (years)		3.5			2.6
Weighted average discount rate		2.9	%		4.5	%

(10) Debt

Other than finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of September 24, 2022 and December 25, 2021.

On August 18, 2020, Landstar entered into an amended and restated credit agreement with a syndicate of banks and JPMorgan Chase Bank, N.A., as administrative agent (the “First Amended and Restated Credit Agreement”).

As previously disclosed in a Form 8-K filed with the SEC on July 8, 2022, Landstar entered into a second amended and restated credit agreement, dated July 1, 2022, with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Second Amended and Restated Credit Agreement”) that superseded and replaced the First Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement, which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $300,000,000, $45,000,000 of which may be utilized in the form of letters of credit. The Second Amended and Restated Credit Agreement also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $600,000,000.

The Second Amended and Restated Credit Agreement, which superseded and replaced the First Amended and Restated Credit Agreement, is referred to herein as the “Credit Agreement.” As of September 24, 2022, there were no borrowings outstanding under the revolving credit facility of the Credit Agreement.

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The revolving credit loans under the Credit Agreement, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10% and an applicable margin ranging from 1.25% to 2.00%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.00%, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. The revolving credit facility bears a commitment fee, payable quarterly in arrears, of 0.20% to 0.30%, based on the Company’s Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.

The Credit Agreement contains a number of covenants that limit, among other things, the incurrence of additional indebtedness. The Company is required to, among other things, maintain a minimum fixed charge coverage ratio, as described in the Credit Agreement, and maintain a Leverage Ratio, as defined in the Credit Agreement, below a specified maximum. The Credit Agreement provides for a restriction on cash dividends and other distributions to stockholders on the Company’s capital stock to the extent there is a default under the Credit Agreement. In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter. The Credit Agreement provides for an event of default in the event that, among other things, a person or group acquires 35% or more of the outstanding capital stock of the Company or obtains power to elect a majority of the Company’s directors or the directors cease to consist of a majority of Continuing Directors, as defined in the Credit Agreement. None of these covenants are presently considered by management to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement.

The interest rates on borrowings under the revolving credit facility are typically tied to short-term interest rates and, as such, carrying value approximates fair value. Interest rates on borrowings under finance leases approximate the interest rates that would currently be available to the Company under similar terms and, as such, carrying value approximates fair value.

(11) Commitments and Contingencies

Short-term investments include $50,637,000 in current maturities of investments held by the Company’s insurance segment at September 24, 2022. The non-current portion of the bond portfolio of $111,457,000 is included in other assets. The short-term investments, together with $34,437,000 of non-current investments, provide collateral for the $76,567,000 of letters of credit issued to guarantee payment of insurance claims. As of September 24, 2022, Landstar also had $33,493,000 of additional letters of credit outstanding under the Credit Agreement.

The Company is involved in certain claims and pending litigation arising from the normal conduct of business. Many of these claims are covered in whole or in part by insurance. Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.

(12) Equity investment

On April 1, 2022, Landstar Investment Holdco, LLC, a newly formed Delaware LLC and wholly owned subsidiary of Landstar System Holdings, Inc., purchased Class A units of Cavnue, LLC, for approximately $4,999,000 in cash consideration. Cavnue, LLC is a privately held company focused on combining technology and road infrastructure to unlock the full potential of connected and autonomous vehicles.

This non-controlling investment in units of Cavnue, LLC, is considered an investment in non-marketable equity securities without a readily determinable market value. The carrying value of our non-marketable equity securities going forward will be adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the interim consolidated financial statements and notes thereto included herein, and with the Company’s audited financial statements and notes thereto for the fiscal year ended December 25, 2021 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2021 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this document that are not based on historical facts are “forward-looking statements.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Form 10-Q contain forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2021 fiscal year; the impact of the coronavirus (COVID-19) pandemic; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; U.S trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2021 fiscal year, described in Item 1A “Risk Factors”, Landstar’s Form 10-Qs for the 2022 first and second quarters, described in Part II, Item 1A “Risk Factors”, and in this report or in Landstar’s other Securities and Exchange Commission filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Introduction

Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc. (collectively referred to herein with their subsidiaries and other affiliated companies as “Landstar” or the “Company”), a Fortune 500 company, is a worldwide, technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third party logistics solutions to meet all of a customer’s transportation needs. Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world. The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of over 1,200 independent commission sales agents and over 112,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company. The nature of the Company’s business is such that a significant portion of its operating costs varies directly with revenue.

Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight. Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Company’s third party capacity providers consist of independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the “BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company under non-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads. Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $6.5 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.

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The transportation logistics segment provides a wide range of integrated transportation management solutions. Transportation services are provided by Landstar’s “Operating Subsidiaries”: Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., Landstar Metro, S.A.P.I. de C.V., and as further described below, Landstar Blue. Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage. Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers. The independent commission sales agents market services provided by the transportation logistics segment. Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue. During the thirty-nine-week period ended September 24, 2022, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 35%, 53% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 8% of the Company’s consolidated revenue in the thirty-nine-week period ended September 24, 2022.

On May 6, 2020, the Company formed a new subsidiary that was subsequently renamed Landstar Blue, LLC (“Landstar Blue”). Landstar Blue arranges truckload brokerage services with a focus on the contract services market. Landstar Blue also helps the Company to develop and test digital technologies and processes for the benefit of all Landstar independent commission sales agents. On June 15, 2020, Landstar Blue completed the acquisition of an independent agent of the Company whose business focused on truckload brokerage services. The results of operations from Landstar Blue are presented as part of the Company’s transportation logistics segment. Revenue from Landstar Blue represented less than 1% of the Company’s transportation logistics segment revenue in the thirty-nine-week period ended September 24, 2022.

The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. The insurance segment provides risk and claims management services to certain of Landstar’s operating subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance directly to certain of Landstar’s operating subsidiaries. Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk is ultimately borne by Signature. Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for the thirty-nine-week period ended September 24, 2022.

Changes in Financial Condition and Results of Operations

Management believes the Company’s success principally depends on its ability to generate freight revenue through its network of independent commission sales agents and to deliver freight safely and efficiently utilizing third party capacity providers. Management believes the most significant factors to the Company’s success include increasing revenue, sourcing capacity, empowering its network through technology-based tools and controlling costs.

Revenue

While customer demand, which is subject to overall economic conditions, ultimately drives increases or decreases in revenue, the Company primarily relies on its independent commission sales agents to establish customer relationships and generate revenue opportunities. Management’s emphasis with respect to revenue growth is on revenue generated by independent commission sales agents who on an annual basis generate $1 million or more of Landstar revenue (“Million Dollar Agents”). Management believes future revenue growth is primarily dependent on its ability to increase both the revenue generated by Million Dollar Agents and the number of Million Dollar Agents through a combination of recruiting new agents, increasing the revenue opportunities generated by existing independent commission sales agents and providing its independent commission sales agents with digital technologies they may use to grow revenue and increase efficiencies at their businesses. During the 2021 fiscal year, 593 independent commission sales agents generated $1 million or more of Landstar revenue and thus qualified as Million Dollar Agents. During the 2021 fiscal year, the average revenue generated by a Million Dollar Agent was $6,150,000 and revenue generated by Million Dollar Agents in the aggregate represented 94% of consolidated revenue.

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Management monitors business activity by tracking the number of loads (volume) and revenue per load by mode of transportation. Revenue per load can be influenced by many factors other than a change in price. Those factors include the average length of haul, freight type, special handling and equipment requirements, fuel costs and delivery time requirements. For shipments involving two or more modes of transportation, revenue is generally classified by the mode of transportation having the highest cost for the load. The following table summarizes this information by trailer type for truck transportation and by mode for all others:

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment	$	3,022,297		$	2,502,025		$	914,154		$	918,115
Unsided/platform equipment		1,336,956			1,112,358			453,924			422,979
Less-than-truckload		105,994			85,551			35,343			30,819
Other truck transportation (1)		632,001			518,472			195,345			208,817
Total truck transportation		5,097,248			4,218,406			1,598,766			1,580,730
Rail intermodal		113,762			120,540			27,652			44,472
Ocean and air cargo carriers		475,156			191,951			164,252			84,111
Other (2)		75,629			61,654			25,462			24,986
	$	5,761,795		$	4,592,551		$	1,816,132		$	1,734,299
Revenue on loads hauled via BCO Independent Contractors included in total truck transportation	$	2,043,772		$	1,899,313		$	627,809		$	690,257
Number of loads:
Truck transportation
Truckload:
Van equipment		1,130,263			1,037,516			366,513			359,263
Unsided/platform equipment		420,436			381,594			141,091			133,332
Less-than-truckload		142,740			135,038			45,912			49,943
Other truck transportation (1)		243,341			208,402			76,594			81,242
Total truck transportation		1,936,780			1,762,550			630,110			623,780
Rail intermodal		31,940			40,420			7,720			13,620
Ocean and air cargo carriers		34,410			29,650			11,520			10,190
		2,003,130			1,832,620			649,350			647,590
Loads hauled via BCO Independent Contractors included in total truck transportation		777,250			773,270			249,420			263,120
Revenue per load:
Truck transportation
Truckload:
Van equipment	$	2,674		$	2,412		$	2,494		$	2,556
Unsided/platform equipment		3,180			2,915			3,217			3,172
Less-than-truckload		743			634			770			617
Other truck transportation (1)		2,597			2,488			2,550			2,570
Total truck transportation		2,632			2,393			2,537			2,534
Rail intermodal		3,562			2,982			3,582			3,265
Ocean and air cargo carriers		13,809			6,474			14,258			8,254
Revenue per load on loads hauled via BCO Independent Contractors	$	2,629		$	2,456		$	2,517		$	2,623
Revenue by capacity type (as a % of total revenue):
Truck capacity providers:
BCO Independent Contractors		35	%		41	%		35	%		40	%
Truck Brokerage Carriers		53	%		50	%		53	%		51	%
Rail intermodal		2	%		3	%		2	%		3	%
Ocean and air cargo carriers		8	%		4	%		9	%		5	%
Other		1	%		1	%		1	%		1	%

⁽¹⁾ Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

⁽²⁾ Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.

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Expenses

Purchased transportation

Also critical to the Company’s success is its ability to secure capacity, particularly truck capacity, at rates that allow the Company to profitably transport customers’ freight. The following table summarizes the number of available truck capacity providers on the dates indicated:

	September 24, 2022		September 25, 2021
BCO Independent Contractors		10,742		10,955
Truck Brokerage Carriers:
Approved and active (1)		71,207		58,676
Other approved		30,222		24,602
		101,429		83,278
Total available truck capacity providers		112,171		94,233
Trucks provided by BCO Independent Contractors		11,644		11,746

⁽¹⁾ Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

Purchased transportation represents the amount a BCO Independent Contractor or other third party capacity provider is paid to haul freight. The amount of purchased transportation paid to a BCO Independent Contractor is primarily based on a contractually agreed-upon percentage of revenue generated by loads hauled by the BCO Independent Contractor. Purchased transportation paid to a Truck Brokerage Carrier is based on either a negotiated rate for each load hauled or, to a lesser extent, a contractually agreed-upon fixed rate per load. Purchased transportation paid to railroads and ocean cargo carriers is based on either a negotiated rate for each load hauled or a contractually agreed-upon fixed rate per load. Purchased transportation paid to air cargo carriers is generally based on a negotiated rate for each load hauled. Purchased transportation as a percentage of revenue for truck brokerage, rail intermodal and ocean cargo services is normally higher than that of BCO Independent Contractor and air cargo services. Purchased transportation is the largest component of costs and expenses and, on a consolidated basis, increases or decreases as a percentage of consolidated revenue in proportion to changes in the percentage of consolidated revenue generated through BCO Independent Contractors and other third party capacity providers and external revenue from the insurance segment, consisting of reinsurance premiums. Purchased transportation as a percent of revenue also increases or decreases in relation to the availability of truck brokerage capacity and with changes in the price of fuel on revenue generated from shipments hauled by Truck Brokerage Carriers. The Company passes 100% of fuel surcharges billed to customers for freight hauled by BCO Independent Contractors to its BCO Independent Contractors. These fuel surcharges are excluded from revenue and the cost of purchased transportation. Purchased transportation costs are recognized over the freight transit period as the performance obligation to the customer is completed.

Commissions to agents

Commissions to agents are based on contractually agreed-upon percentages of (i) revenue, (ii) revenue less the cost of purchased transportation, or (iii) revenue less a contractually agreed upon percentage of revenue retained by Landstar and the cost of purchased transportation (the “retention contracts”). Commissions to agents as a percentage of consolidated revenue vary directly with fluctuations in the percentage of consolidated revenue generated by the various modes of transportation and reinsurance premiums and, in general, vary inversely with changes in the amount of purchased transportation as a percentage of revenue on services provided by Truck Brokerage Carriers, railroads, air cargo carriers and ocean cargo carriers. Commissions to agents are recognized over the freight transit period as the performance obligation to the customer is completed.

Other operating costs, net of gains on asset sales/dispositions

Maintenance costs for Company-provided trailing equipment and BCO Independent Contractor recruiting and qualification costs are the largest components of other operating costs. Also included in other operating costs are trailer rental costs, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and gains/losses, if any, on sales of Company-owned trailing equipment.

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Insurance and claims

With respect to insurance and claims cost, potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable.

For periods prior to May 1, 2019, Landstar retains liability for commercial trucking claims up to $5 million per occurrence and maintains various third party insurance arrangements for liabilities in excess of its $5 million self-insured retention. Effective May 1, 2019, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “Initial Excess Policy”) with a third party insurance company. The Company subsequently extended the Initial Excess Policy for one additional policy year, from May 1, 2022 through April 30, 2023. For commercial trucking claims incurred on or after May 1, 2022 through April 30, 2023, the extended Initial Excess Policy provides for a limit for a single loss of $5 million, with a remaining aggregate limit of $10 million for the policy period ending April 30, 2023, and an option to increase such aggregate limit for a pre-established amount of additional premium. If aggregate losses under the Initial Excess Policy exceed the aggregate limit for the period ending April 30, 2023, and the Company did not elect to increase such aggregate limit for a pre-established amount of additional premium, the Company would retain liability of up to $10 million per occurrence, inclusive of its $5 million self-insured retention for commercial trucking claims during the remainder of the policy period ending April 30, 2023.

The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10 million. These third party arrangements provide coverage on a per occurrence or aggregated basis. In recent years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million. Within the transportation logistics industry, these verdicts are often referred to as “Nuclear Verdicts.” The increase in Nuclear Verdicts has had a significant impact on the cost of commercial auto liability claims throughout the United States. Due to the increasing cost of commercial auto liability claims, the availability of excess coverage has significantly decreased, and the pricing associated with such excess coverage, to the extent available, has significantly increased. With respect to the annual policy year ended April 30, 2021, as compared to the annual policy year ended April 30, 2020, the Company experienced an increase of approximately $14 million, or over 170%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million. Effective May 1, 2021, with respect to the annual policy year ending April 30, 2022, as compared to the annual policy year ended April 30, 2021, the Company experienced an increase of approximately $3 million, or 19%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million. Effective May 1, 2022, with respect to the annual policy year ending April 30, 2023, as compared to the annual policy year ended April 30, 2022, the Company experienced an increase of approximately $2.3 million, or 10%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.

Moreover, in recent years the Company has increased the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage. For example, with respect to a hypothetical claim in the amount of $35 million incurred during the annual policy year ending April 30, 2023, the Company would have an aggregate financial exposure of approximately $10 million. Furthermore, the Company’s third party insurance arrangements provide excess coverage up to an uppermost coverage layer, in excess of which the Company retains additional financial exposure. No assurances can be given that the availability of excess coverage for commercial trucking claims will not continue to deteriorate, that the pricing associated with such excess coverage, to the extent available, will not continue to increase, nor that insurance coverage from third party insurers for excess coverage of commercial trucking claims will even be available on commercially reasonable terms at certain levels. Moreover, the occurrence of a Nuclear Verdict, or the settlement of a catastrophic injury and/or fatality claim that could have otherwise resulted in a Nuclear Verdict, could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.

Further, the Company retains liability of up to $1,000,000 for each general liability claim, up to $250,000 for each workers’ compensation claim and up to $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Company’s BCO Independent Contractors, the Company retains liability of up to $500,000, $1,000,000 or $2,000,000 with respect to certain occupational accident claims and up to $750,000 with respect to certain workers’ compensation claims. The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various factors including the extent to which such carriers maintain their own insurance coverage. A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.

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Selling, general and administrative

During the thirty-nine-week period ended September 24, 2022, employee compensation and benefits accounted for approximately 68% of the Company’s selling, general and administrative costs. Employee compensation and benefits include wages and employee benefit costs as well as incentive compensation and stock-based compensation expense. Incentive compensation and stock-based compensation expense is highly variable in nature in comparison to wages and employee benefit costs.

Depreciation and amortization

Depreciation and amortization primarily relate to depreciation of trailing equipment and information technology hardware and software.

Costs of revenue

The Company incurs costs of revenue related to the transportation of freight and, to a much lesser extent, reinsurance premiums received by Signature. Costs of revenue include variable costs of revenue and other costs of revenue. Variable costs of revenue include purchased transportation and commissions to agents, as these costs are entirely variable on a shipment-by-shipment basis. Other costs of revenue include fixed costs of revenue and semi-variable costs of revenue, where such costs may vary over time based on certain economic factors or operational metrics such as the number of Company-controlled trailers, the number of BCO Independent Contractors, the frequency and severity of insurance claims, the number of miles traveled by BCO Independent Contractors, or the number and/or scale of information technology projects in process or in-service to support revenue generating activities, rather than on a shipment-by-shipment basis. Other costs of revenue associated with the transportation of freight include: (i) other operating costs, primarily consisting of trailer maintenance and BCO Independent Contractor recruiting and qualification costs, as reported in the Company’s Consolidated Statements of Income, (ii) transportation-related insurance premiums paid and claim costs incurred, included as a portion of insurance and claims in the Company’s Consolidated Statements of Income, (iii) costs incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support our independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income; and (iv) depreciation on Company-owned trailing equipment, included as a portion of depreciation and amortization in the Company’s Consolidated Statements of Income. Other costs of revenue associated with reinsurance premiums received by Signature are comprised of broker commissions and other fees paid related to the administration of insurance programs to BCO Independent Contractors and are included in selling, general and administrative in the Company’s Consolidated Statements of Income. In addition to costs of revenue, the Company incurs various other costs relating to its business, including most selling, general and administrative costs and portions of costs attributable to insurance and claims and depreciation and amortization. Management continually monitors all components of the costs incurred by the Company and establishes annual cost budgets that, in general, are used to benchmark costs incurred on a monthly basis.

Gross Profit, Variable Contribution, Gross Profit Margin and Variable Contribution Margin

The following table sets forth calculations of gross profit, defined as revenue less costs of revenue, and gross profit margin defined as gross profit divided by revenue, for the periods indicated. The Company refers to revenue less variable costs of revenue as “variable contribution” and variable contribution divided by revenue as “variable contribution margin”. Variable contribution and variable contribution margin are each non-GAAP financial measures. The closest comparable GAAP financial measures to variable contribution and variable contribution margin are, respectively, gross profit and gross profit margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third party capacity providers and independent commission sales agents in order to provide services to our customers. The Company believes variable contribution and variable contribution margin are important performance measurements and management considers variable contribution and variable contribution margin in evaluating the Company’s financial performance and in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs.

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The reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin are each presented below:

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Revenue	$	5,761,795		$	4,592,551		$	1,816,132		$	1,734,299
Costs of revenue:
Purchased transportation		4,512,341			3,583,197			1,416,323			1,356,671
Commissions to agents		465,759			356,997			154,125			135,295
Variable costs of revenue		4,978,100			3,940,194			1,570,448			1,491,966
Trailing equipment depreciation		27,760			26,362			9,397			8,615
Information technology costs		13,868			9,534			4,829			3,450
Insurance-related costs (1)		98,821			78,175			32,380			30,502
Other operating costs		34,878			27,117			13,356			10,572
Other costs of revenue		175,327			141,188			59,962			53,139
Total costs of revenue		5,153,427			4,081,382			1,630,410			1,545,105
Gross profit	$	608,368		$	511,169		$	185,722		$	189,194
Gross profit margin		10.6	%		11.1	%		10.2	%		10.9	%
Plus: other costs of revenue		175,327			141,188			59,962			53,139
Variable contribution	$	783,695		$	652,357		$	245,684		$	242,333
Variable contribution margin		13.6	%		14.2	%		13.5	%		14.0	%

(1) Insurance-related costs in the table above include (i) other costs of revenue related to the transportation of freight that are included as a portion of insurance and claims in the Company’s Consolidated Statements of Income and (ii) certain other costs of revenue related to reinsurance premiums received by Signature that are included as a portion of selling, general and administrative in the Company’s Consolidated Statements of Income. Insurance and claims costs included in other costs of revenue relating to the transportation of freight primarily consist of insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight and the related cost of claims incurred under those programs, and, to a lesser extent, the cost of claims incurred under insurance programs available to BCO Independent Contractors that are reinsured by Signature. Other insurance and claims costs included in costs of revenue that are included in selling, general and administrative in the Company’s Consolidated Statements of Income consist of brokerage commissions and other fees incurred by Signature relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by Signature.

In general, variable contribution margin on revenue generated by BCO Independent Contractors represents a fixed percentage due to the nature of the contracts that pay a fixed percentage of revenue to both the BCO Independent Contractors and independent commission sales agents. For revenue generated by Truck Brokerage Carriers, variable contribution margin may be either a fixed or variable percentage, depending on the contract with each individual independent commission sales agent. Variable contribution margin on revenue generated from shipments hauled by railroads, air cargo carriers, ocean cargo carriers and Truck Brokerage Carriers, other than those under retention contracts, is variable in nature, as the Company’s contracts with independent commission sales agents provide commissions to agents at a contractually agreed upon percentage of the amount represented by revenue less purchased transportation for these types of shipments. Approximately 40% of the Company’s consolidated revenue in the thirty-nine-week period ended September 24, 2022 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 60% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.

Operating income as a percentage of gross profit and operating income as a percentage of variable contribution

The following table presents operating income as a percentage of gross profit and operating income as a percentage of variable contribution. The Company’s operating income as a percentage of variable contribution is a non-GAAP financial measure calculated as operating income divided by variable contribution. The Company believes that operating income as a percentage of variable contribution is useful and meaningful to investors for the following principal reasons: (i) the variable costs of revenue for a significant portion of the business are highly influenced by short-term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; (ii) disclosure of this measure allows investors to better

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understand the underlying trends in the Company’s results of operations; (iii) this measure is meaningful to investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissions to agents that the Company incurs to provide services to our customers; and (iv) management considers this financial information in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs.

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Gross profit	$	608,368		$	511,169		$	185,722		$	189,194
Operating income	$	446,749		$	356,928		$	133,498		$	131,412
Operating income as % of gross profit		73.4	%		69.8	%		71.9	%		69.4	%
Variable contribution	$	783,695		$	652,357		$	245,684		$	242,333
Operating income	$	446,749		$	356,928		$	133,498		$	131,412
Operating income as % of variable contribution		57.0	%		54.7	%		54.3	%		54.2	%

The increase in operating income as a percentage of gross profit from the 2021 thirty-nine-week period to the 2022 thirty-nine-week period resulted from operating income increasing at a more rapid percentage rate than the increase in gross profit, as the Company was able to scale our fixed cost infrastructure, primarily certain components of selling, general and administrative costs, across a larger gross profit base. The increase in operating income as a percentage of gross profit from the 2021 thirteen-week period to the 2022 thirteen-week period resulted from operating income increasing notwithstanding a modest decrease in gross profit, as certain components of selling, general and administrative costs, namely incentive and equity compensation under the Company’s variable compensation programs, decreased approximately $8,500,000 from the 2021 thirteen-week period to the 2022 thirteen-week period.

The increase in operating income as a percentage of variable contribution from the 2021 thirty-nine-week period to the 2022 thirty-nine-week period resulted from operating income increasing at a more rapid percentage rate than the increase in variable contribution, as the Company was able to scale our fixed cost infrastructure, primarily certain components of selling, general and administrative costs, as well as certain components of our other costs of revenue, across a larger variable contribution base. The ten basis point increase in operating income as a percentage of variable contribution from the 2021 thirteen-week period to the 2022 thirteen-week period resulted from operating income increasing at a modestly higher percentage rate than the increase in variable contribution, as the Company was able to scale our fixed cost infrastructure, primarily certain components of selling, general and administrative costs across a larger variable contribution base.

Also, as previously mentioned, the Company reports two operating segments: the transportation logistics segment and the insurance segment. External revenue at the insurance segment, representing reinsurance premiums, has historically been relatively consistent on an annual basis at 2% or less of consolidated revenue and generally corresponds directly with the number of trucks provided by BCO Independent Contractors. The discussion of cost line items in Management’s Discussion and Analysis of Financial Condition and Results of Operations considers the Company’s costs on a consolidated basis rather than on a segment basis. Management believes this presentation format is the most appropriate to assist users of the financial statements in understanding the Company’s business for the following reasons: (1) the insurance segment has no other operating costs; (2) discussion of insurance and claims at either segment without reference to the other may create confusion amongst investors and potential investors due to intercompany arrangements and specific deductible programs that affect comparability of financial results by segment between various fiscal periods but that have no effect on the Company from a consolidated reporting perspective; (3) selling, general and administrative costs of the insurance segment comprise less than 10% of consolidated selling, general and administrative costs and have historically been relatively consistent on a year-over-year basis; and (4) the insurance segment has no depreciation and amortization.

THIRTY NINE WEEKS ENDED SEPTEMBER 24, 2022 COMPARED TO THIRTY NINE WEEKS ENDED SEPTEMBER 25, 2021

Revenue for the 2022 thirty-nine-week period was $5,761,795,000, an increase of $1,169,244,000, or 25%, compared to the 2021 thirty-nine-week period. Transportation revenue increased $1,163,398,000, or 26%. The increase in transportation revenue was attributable

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to increased revenue per load of approximately 15% and an increased number of loads hauled of approximately 9% compared to the 2021 thirty-nine-week period. Reinsurance premiums were $58,836,000 and $52,990,000 for the 2022 and 2021 thirty-nine-week periods, respectively. The increase in revenue from reinsurance premiums was primarily attributable to (i) an increase in the aggregate value of equipment insured by BCO Independent Contractors under a physical damage program reinsured by Signature; (ii) an increase in the average number of trucks provided by BCO Independent Contractors and (iii) participation levels among BCO Independent Contractors in certain occupational accident programs and workers’ compensation programs in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period.

Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for the 2022 thirty-nine-week period was $5,097,248,000, representing 88% of total revenue, an increase of $878,842,000, or 21%, compared to the 2021 thirty-nine-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 10% compared to the 2021 thirty-nine-week period, and the number of loads hauled by third party truck capacity providers increased approximately 10% in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period.

The increase in revenue per load on loads hauled via truck was due to a tight truck capacity environment experienced during the 2022 thirty-nine-week period, in particular during the first fiscal quarter of 2022, and the impact of higher diesel fuel costs on loads hauled via Truck Brokerage Carriers, partially offset by (i) a decrease in the number of loads hauled via heavy specialized equipment, which typically have a higher revenue per load, as a percentage of total truck loads and (ii) a decreased average length of haul during the 2022 thirty-nine-week period. Revenue per load on loads hauled via van equipment increased 11%, revenue per load on loads hauled via unsided/platform equipment increased 9%, revenue per load on less-than-truckload loadings increased 17% and other truck transportation services revenue per load increased 4% as compared to the 2021 thirty-nine-week period.

The increase in the number of loads hauled via truck compared to the 2021 thirty-nine-week period was due to a broad-based increase in demand for the Company’s truck transportation services. Loads hauled via van equipment increased 9%, loads hauled via unsided/platform equipment increased 10%, less-than-truckload loadings increased 6% and loads hauled via other truck transportation services increased 17% as compared to the 2021 thirty-nine-week period.

Fuel surcharges billed to customers on revenue generated by BCO Independent Contractors are excluded from revenue. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $153,195,000 and $74,195,000 in the 2022 and 2021 thirty-nine-week periods, respectively. It should be noted that billings to many customers of the Company’s truck brokerage services include a single all-in rate that does not separately identify fuel surcharges on loads hauled via Truck Brokerage Carriers. Accordingly, the overall impact of changes in fuel prices on revenue and revenue per load on loads hauled via truck is likely to be greater than that indicated.

Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for the 2022 thirty-nine-week period was $588,918,000, or 10% of total revenue, an increase of $276,427,000, or 88%, compared to the 2021 thirty-nine-week period. Revenue per load on revenue generated by multimode capacity providers increased approximately 99% in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period, while the number of loads hauled by multimode capacity providers decreased approximately 5% over the same period. Revenue per load on loads hauled by multimode capacity providers increased for all modes, primarily due to continuing U.S. and global economic recoveries coupled with the impact of global supply chain disruptions which were particularly acute with respect to international ocean and air freight. Revenue per load on loads hauled via air, ocean and rail intermodal increased 139%, 93% and 19%, respectively, during the 2022 thirty-nine-week period as compared to the 2021 thirty-nine-week period. Revenue per load on revenue generated by multimode capacity providers is influenced by many factors, including revenue mix among the various modes of transportation used, length of haul, complexity of freight, density of freight lanes, fuel costs and availability of capacity. The decrease in the number of loads hauled by multimode capacity providers was due to a 21% decrease in rail loadings and a 19% decrease in air loadings, partially offset by a 34% increase in ocean loadings. The 21% decrease in rail loadings was broad-based across several agencies and customers, and the 19% decrease in air loadings was entirely attributable to decreased loadings at one specific customer. The 34% increase in ocean loadings was due to a broad-based increase in demand across many customers for the Company’s ocean services.

Purchased transportation was 78.3% and 78.0% of revenue in the 2022 and 2021 thirty-nine-week periods, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to (i) an increased percentage of revenue generated by Truck Brokerage Carriers, which typically has a higher rate of purchased transportation than revenue generated by BCO Independent Contractors and (ii) an increased percentage of revenue generated by multimode capacity providers, which typically has a higher rate of purchased transportation than third party truck capacity providers, partially offset by a lower rate of purchased transportation on revenue generated by Truck Brokerage Carriers. Commissions to agents were 8.1% and 7.8% of revenue in the 2022 and 2021 thirty-nine-week periods, respectively. The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

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Investment income was $2,023,000 and $2,138,000 in the 2022 and 2021 thirty-nine-week periods, respectively. The decrease in investment income was primarily attributable to a lower average investment balance held by the insurance segment in the 2022 thirty-nine-week period, partially offset by higher average rates of return on investments in the 2022 thirty-nine-week period.

Other operating costs increased $7,761,000 in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period. The increase in other operating costs compared to the prior year was primarily due to (i) increased trailing equipment maintenance costs as a result of (x) increased labor and parts costs charged by the Company’s network of third party trailer maintenance facilities as the Company retained older trailing equipment to support current business levels; and (y) an increased average trailer fleet size during the 2022 thirty-nine-week period and (ii) the impact of the resumption of a large in-person event for the Company’s BCO Independent Contractors.

Insurance and claims increased $21,067,000 in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period. The increase in insurance and claims expense compared to the prior year was primarily due to increased severity of current year trucking claims during the 2022 thirty-nine-week period, the impact of net unfavorable development of prior years’ claims in the 2022 thirty-nine-week period and increased insurance premiums, primarily for commercial auto and excess liability coverage. During the 2022 and 2021 thirty-nine-week periods, insurance and claims costs included $7,505,000 and $4,522,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Selling, general and administrative costs increased $6,479,000 in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period. The increase in selling, general and administrative costs compared to the prior year was attributable to increased wages, an increased provision for customer bad debt and the return of the Company’s annual agent convention held in April 2022, partially offset by decreased stock-based compensation expense and a decreased provision for incentive compensation. Included in selling, general and administrative costs was stock-based compensation expense of $9,409,000 and $18,717,000 for the 2022 and 2021 thirty-nine-week periods, respectively, and incentive compensation expense of $14,185,000 and $21,370,000 for the 2022 and 2021 thirty-nine-week periods, respectively.

Depreciation and amortization expense increased $6,095,000 in the 2022 thirty-nine-week period compared to the 2021 thirty-nine-week period. The increase in depreciation and amortization expense was primarily due to increased depreciation on digital technology tools in connection with the deployment of new and upgraded applications for use by the Company’s network of agents, capacity providers and employees, and to a lesser extent, in connection with increased trailing equipment depreciation.

Interest and debt expense in the 2022 thirty-nine-week period increased $301,000 compared to the 2021 thirty-nine-week period. The increase in interest and debt expense was primarily attributable to increased average borrowings on the Company’s revolving credit facility during the 2022 thirty-nine-week period, as the Company had no borrowings under its revolving credit facility during the 2021 period. The Company had no borrowings under its revolving credit facility as of the end of the 2022 thirty-nine-week period.

The provisions for income taxes for the 2022 and 2021 thirty-nine-week periods were based on estimated annual effective income tax rates of 24.5% and 24.4%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The estimated annual effective income tax rate was higher than the statutory federal income tax rate of 21% in both periods primarily attributable to state taxes and nondeductible executive compensation. The effective income tax rate for the 2022 thirty-nine-week period was 23.9%, which was lower than the estimated annual effective income tax rate of 24.5%, primarily attributable to excess tax benefits realized on stock-based awards. The effective income tax rate in the 2021 thirty-nine-week period of 24.2% was lower than the 24.4% estimated annual effective income tax rate, primarily due to excess tax benefits realized on stock-based awards in the 2021 thirty-nine-week period.

Net income was $337,612,000, or $9.15 per diluted share, in the 2022 thirty-nine-week period. Net income was $268,209,000, or $7.00 per diluted share, in the 2021 thirty-nine-week period.

THIRTEEN WEEKS ENDED SEPTEMBER 24, 2022 COMPARED TO THIRTEEN WEEKS ENDED SEPTEMBER 25, 2021

Revenue for the 2022 thirteen-week period was $1,816,132,000, an increase of $81,833,000, or 5%, compared to the 2021 thirteen-week period. Transportation revenue increased $80,397,000, or 5%. The increase in transportation revenue was attributable to increased revenue per load of approximately 4%, while the number of loads hauled was approximately equal to the 2021 thirteen-week period. Reinsurance premiums were $19,731,000 and $18,295,000 for the 2022 and 2021 thirteen-week periods, respectively. The increase in revenue from reinsurance premiums was primarily attributable to (i) an increase in the aggregate value of equipment insured by BCO

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Independent Contractors under a physical damage program reinsured by Signature; (ii) an increase in the average number of trucks provided by BCO Independent Contractors and (iii) participation levels among BCO Independent Contractors in certain occupational accident programs and workers’ compensation programs in the 2022 thirteen-week period compared to the 2021 thirteen-week period.

Truck transportation revenue generated by third party truck capacity providers for the 2022 thirteen-week period was $1,598,766,000, representing 88% of total revenue, an increase of $18,036,000, or 1%, compared to the 2021 thirteen-week period. The number of loads hauled by third party truck capacity providers increased approximately 1% in the 2022 thirteen-week period compared to the 2021 thirteen-week period, while revenue per load on loads hauled by third party truck capacity providers was approximately equal to the 2021 thirteen-week period.

The increase in the number of loads hauled via truck compared to the 2021 thirteen-week period was due to (i) a broad-based increase in demand for the Company’s truck transportation services provided via unsided/platform equipment and (ii) a modest increase in demand for the Company’s truck transportation services provided via van equipment, partially offset by reduced demand for substitute line-haul and power-only services from certain parcel and less-than-truckload carriers. Loads hauled via unsided/platform equipment increased 6% and loads hauled via van equipment increased 2%, while less-than-truckload loadings decreased 8% and other truck transportation services load count decreased 6% as compared to the 2021 thirteen-week period. The number of loads hauled via truck increased 5% in July, was relatively flat in August and then declined 1% in September, as compared to the corresponding periods in 2021.

Fuel surcharges billed to customers on revenue generated by BCO Independent Contractors are excluded from revenue. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $58,658,000 and $28,621,000 in the 2022 and 2021 thirteen-week periods, respectively.

Transportation revenue generated by multimode capacity providers for the 2022 thirteen-week period was $191,904,000, or 11% of total revenue, an increase of $63,321,000, or 49%, compared to the 2021 thirteen-week period. Revenue per load on revenue generated by multimode capacity providers increased approximately 85% in the 2022 thirteen-week period compared to the 2021 thirteen-week period, while the number of loads hauled by multimode capacity providers decreased approximately 19% over the same period. Revenue per load on loads hauled by multimode capacity providers increased for all modes, primarily due to the continuing U.S. and global economic recoveries coupled with the impact of global supply chain disruptions which were particularly acute with respect to international ocean and air freight. Revenue per load on loads hauled via air, ocean and rail intermodal increased 127%, 63% and 10%, respectively, during the 2022 thirteen-week period as compared to the 2021 thirteen-week period. The decrease in the number of loads hauled by multimode capacity providers was due to a 43% decrease in rail loadings, partially offset by an 18% increase in ocean loadings. Air loadings during the 2022 thirteen-week period were approximately equal to the 2021 thirteen-week period. The 43% decrease in rail loadings was broad-based across several agencies and customers. The 18% increase in ocean loadings was due to a broad-based increase in demand across many customers for the Company’s ocean services.

Purchased transportation was 78.0% and 78.2% of revenue in the 2022 and 2021 thirteen-week periods, respectively. The decrease in purchased transportation as a percentage of revenue was primarily due to a lower rate of purchased transportation on revenue generated by Truck Brokerage Carriers, partially offset by (i) an increased percentage of revenue generated by Truck Brokerage Carriers, which typically has a higher rate of purchased transportation than revenue generated by BCO Independent Contractors; and (ii) an increased percentage of revenue generated by multimode capacity providers, which typically has a higher rate of purchased transportation than third party truck capacity providers. Commissions to agents were 8.5% and 7.8% of revenue in the 2022 and 2021 thirteen-week periods, respectively. The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

Investment income was $716,000 and $706,000 in the 2022 and 2021 thirteen-week periods, respectively.

Other operating costs increased $2,784,000 in the 2022 thirteen-week period compared to the 2021 thirteen-week period. The increase in other operating costs compared to the prior year was primarily due to (i) increased trailing equipment maintenance costs as a result of (x) increased labor and parts costs as the Company retained older equipment to support current business levels, and (y) an increased average trailer fleet size during the 2022 thirteen-week period, (ii) the impact of the resumption of a large in-person event for the Company’s BCO Independent Contractors and (iii) decreased gains on the sale of operating property.

Insurance and claims increased $1,876,000 in the 2022 thirteen-week period compared to the 2021 thirteen-week period. The increase in insurance and claims expense compared to the prior year was primarily due to increased severity of current year trucking claims during the 2022 thirteen-week period as well as increased premiums for commercial auto and excess liability coverage, partially offset by decreased net unfavorable development of prior years’ claims during the 2022 thirteen-week period. During the 2022 and 2021 thirteen-week periods, insurance and claims costs included $2,124,000 and $3,542,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

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Selling, general and administrative costs decreased $5,679,000 in the 2022 thirteen-week period compared to the 2021 thirteen-week period. The decrease in selling, general and administrative costs compared to the prior year was attributable to a decreased provision for incentive compensation, decreased stock-based compensation expense and decreased employee benefit costs, partially offset by increased wages. Included in selling, general and administrative costs was incentive compensation expense of $4,462,000 and $8,755,000 for the 2022 and 2021 thirteen-week periods, respectively, and stock-based compensation expense of $3,599,000 and $7,824,000 for the 2022 and 2021 thirteen-week periods, respectively.

Depreciation and amortization expense increased $2,294,000 in the 2022 thirteen-week period compared to the 2021 thirteen-week period. The increase in depreciation and amortization expense was primarily due to increased depreciation on digital technology tools in connection with the deployment of new and upgraded applications for use by the Company’s network of agents, capacity providers and employees, and to a lesser extent, in connection with increased trailing equipment depreciation.

Interest and debt expense in the 2022 thirteen-week period increased $82,000 compared to the 2021 thirteen-week period.

The provisions for income taxes for the 2022 and 2021 thirteen-week periods were based on estimated annual effective income tax rates of 24.5% and 24.4%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The estimated annual effective income tax rate was higher than the statutory federal income tax rate of 21% in both periods primarily attributable to state taxes and nondeductible executive compensation. The effective income tax rate for the 2022 thirteen-week period was 24.3%, which was lower than the estimated annual effective income tax rate of 24.5%, primarily attributable to higher than anticipated state income tax refunds and excess tax benefits realized on stock-based awards. The effective income tax rate in the 2021 thirteen-week period of 24.4% was consistent with the estimated annual effective income tax rate of 24.4%.

Net income was $100,218,000, or $2.76 per diluted share, in the 2022 thirteen-week period. Net income was $98,675,000, or $2.58 per diluted share, in the 2021 thirteen-week period.

CAPITAL RESOURCES AND LIQUIDITY

Working capital and the ratio of current assets to current liabilities were $543,330,000 and 1.6 to 1, respectively, at September 24, 2022, compared with $512,917,000 and 1.5 to 1, respectively, at December 25, 2021. Landstar has historically operated with current ratios within the range of 1.5 to 1 to 2.0 to 1. Cash provided by operating activities was $436,381,000 in the 2022 thirty-nine-week period compared with $216,990,000 in the 2021 thirty-nine-week period. The increase in cash flow provided by operating activities was primarily attributable to favorable working capital impacts in connection with the timing of collections of receivables and payment of certain payables and increased net income.

The Company declared and paid $0.80 per share, or $29,506,000 in the aggregate, in cash dividends during the thirty-nine-week period ended September 24, 2022 and, during such period, also paid $75,387,000 of dividends payable which were declared during fiscal year 2021 and included in current liabilities in the consolidated balance sheet at December 25, 2021. The Company declared and paid $0.67 per share, or $25,693,000 in the aggregate, in cash dividends during the thirty-nine-week period ended September 25, 2021 and, during such period, also paid $76,770,000 of dividends payable which were declared during fiscal year 2020 and included in current liabilities in the consolidated balance sheet at December 26, 2020. During the thirty-nine-week period ended September 24, 2022, the Company purchased 1,900,826 shares of its common stock at a total cost of $285,983,000. During the thirty-nine-week period ended September 25, 2021, the Company purchased 317,046 shares of its common stock at a total cost of $50,230,000. As of September 24, 2022, the Company may purchase in the aggregate up to 1,099,174 shares of its common stock under its authorized stock purchase program. Long-term debt, including current maturities, was $109,470,000 at September 24, 2022, $2,334,000 lower than at December 25, 2021.

Shareholders’ equity was $873,173,000, or 89% of total capitalization (defined as long-term debt including current maturities plus equity), at September 24, 2022, compared to $862,010,000, or 89% of total capitalization, at December 25, 2021. The increase in shareholders’ equity was primarily the result of net income, partially offset by purchases of shares of the Company’s common stock, dividends declared by the Company in the 2022 thirty-nine-week period and taxes paid in lieu of shares issued related to stock-based compensation plans.

On August 18, 2020, Landstar entered into an amended and restated credit agreement with a syndicate of banks and JPMorgan Chase Bank, N.A., as administrative agent (the “First Amended and Restated Credit Agreement”). As previously disclosed in a Form 8-K filed

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with the SEC on July 8, 2022, Landstar entered into a second amended and restated credit agreement, dated July 1, 2022, with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Second Amended and Restated Credit Agreement”) that superseded and replaced the First Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $300,000,000, $45,000,000 of which may be utilized in the form of letters of credit. The Second Amended and Restated Credit Agreement also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $600,000,000.    The Second Amended and Restated Credit Agreement, which superseded and replaced the First Amended and Restated Credit Agreement, is referred to herein as the “Credit Agreement.” As of September 24, 2022, there were no borrowings outstanding under the revolving credit facility of the Credit Agreement.

The Credit Agreement contains a number of covenants that limit, among other things, the incurrence of additional indebtedness. The Company is required to, among other things, maintain a minimum fixed charge coverage ratio, as described in the Credit Agreement, and maintain a Leverage Ratio, as defined in the Credit Agreement, below a specified maximum. The Credit Agreement provides for a restriction on cash dividends and other distributions to stockholders on the Company’s capital stock to the extent there is a default under the Credit Agreement. In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter. The Credit Agreement provides for an event of default in the event that, among other things, a person or group acquires 35% or more of the outstanding capital stock of the Company or obtains power to elect a majority of the Company’s directors or the directors cease to consist of a majority of Continuing Directors, as defined in the Credit Agreement. None of these covenants are presently considered by management to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement.

At September 24, 2022, the Company had no borrowings outstanding and $33,493,000 of letters of credit outstanding under the Credit Agreement. At September 24, 2022, there was $266,507,000 available for future borrowings under the Credit Agreement. In addition, the Company has $76,567,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $85,074,000 at September 24, 2022. Investments, all of which are carried at fair value, include primarily investment-grade bonds and asset-backed securities having maturities of up to five years. Fair value of investments is based primarily on quoted market prices. See “Notes to Consolidated Financial Statements” included herein for further discussion on measurement of fair value of investments.

Historically, the Company has generated sufficient operating cash flow to meet its debt service requirements, fund continued growth, both organic and through acquisitions, complete or execute share purchases of its common stock under authorized share purchase programs, pay dividends and meet working capital needs. As an asset-light provider of integrated transportation management solutions, the Company’s annual capital requirements for operating property are generally for trailing equipment and information technology hardware and software. In addition, a significant portion of the trailing equipment used by the Company is provided by third party capacity providers, thereby reducing the Company’s capital requirements. During the 2022 thirty-nine-week period, the Company purchased $21,096,000 of operating property and acquired $26,741,000 of trailing equipment by entering into finance leases. Landstar anticipates acquiring either by purchase or lease financing during the remainder of fiscal year 2022 approximately $17,000,000 in operating property, consisting primarily of new trailing equipment to replace older trailing equipment and information technology equipment.

On April 1, 2022, Landstar Investment Holdco, LLC, a newly formed Delaware LLC and wholly owned subsidiary of Landstar System Holdings, Inc., purchased Class A units of Cavnue, LLC for approximately $4,999,000 in cash consideration. Cavnue, LLC is a privately held company focused on combining technology and road infrastructure to unlock the full potential of connected and autonomous vehicles.

Management believes that cash flow from operations combined with the Company’s borrowing capacity under the Credit Agreement will be adequate to meet Landstar’s debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase program and meet working capital needs.

LEGAL MATTERS

The Company is involved in certain claims and pending litigation arising from the normal conduct of business. Many of these claims are covered in whole or in part by insurance. Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Landstar provides for the estimated costs of self-insured claims primarily on an actuarial basis. The amount recorded for the estimated liability for claims incurred is based upon the facts and circumstances known on the applicable balance sheet date. The ultimate resolution of these claims may be for an amount greater or less than the amount estimated by management. The Company continually revises its existing claim estimates as new or revised information becomes available on the status of each claim. Historically, the Company has experienced both favorable and unfavorable development of prior years’ claims estimates. During the 2022 and 2021 thirty-nine-week periods, insurance and claims costs included $7,505,000 and $4,522,000 of net unfavorable adjustments to prior years’ claims estimates, respectively. It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at September 24, 2022.

Significant variances from management’s estimates for the ultimate resolution of self-insured claims could be expected to positively or negatively affect Landstar’s earnings in a given quarter or year. However, management believes that the ultimate resolution of these items, given a range of reasonably likely outcomes, will not significantly affect the long-term financial condition of Landstar or its ability to fund its continuing operations.

SEASONALITY

Landstar’s operations are subject to seasonal trends common to the trucking industry. Truckload shipments for the quarter ending in March are typically lower than for the quarters ending June, September and December.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to changes in interest rates as a result of its financing activities, primarily its borrowings on its revolving credit facility, if any, and investing activities with respect to investments held by the insurance segment.

On August 18, 2020, Landstar entered into the First Amended and Restated Credit Agreement with a syndicate of banks and JPMorgan Chase Bank, N.A., as administrative agent. As previously disclosed in a Form 8-K filed with the SEC on July 8, 2022, Landstar entered into the Second Amended and Restated Credit Agreement, dated July 1, 2022, with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent. The Second Amended and Restated Credit Agreement, which superseded and replaced the First Amended and Restated Credit Agreement, is referred to herein as the “Credit Agreement.” The Second Amended and Restated Credit Agreement which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $300,000,000, $45,000,000 of which may be utilized in the form of letters of credit. The Second Amended and Restated Credit Agreement also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $600,000,000.

The revolving credit loans under the Credit Agreement as of September 24, 2022, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10% and an applicable margin ranging from 1.25% to 2.00%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.00%, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. The revolving credit facility bears a commitment fee, payable in arrears, of 0.20% to 0.30%, based on the Company’s Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. During the entire third quarter of 2022 and as of September 24, 2022 and December 25, 2021, the Company had no borrowings outstanding under the Credit Agreement.

Long-term investments, all of which are available-for-sale and are carried at fair value, include primarily investment-grade bonds and asset-backed securities having maturities of up to five years. Assuming that the long-term portion of investments remains at $111,457,000, the balance at September 24, 2022, a hypothetical increase or decrease in interest rates of 100 basis points would not have a material impact on future earnings on an annualized basis. Short-term investments consist of short-term investment-grade instruments and the current maturities of investment-grade corporate bonds and asset-backed securities. Accordingly, any future interest rate risk on these short-term investments would not be material to the Company’s operating results.

Assets and liabilities of the Company’s Canadian and Mexican operations are translated from their functional currency to U.S. dollars using exchange rates in effect at the balance sheet date and revenue and expense accounts are translated at average monthly exchange rates during the period. Adjustments resulting from the translation process are included in accumulated other comprehensive income. Transactional gains and losses arising from receivable and payable balances, including intercompany balances, in the normal course of business that are denominated in a currency other than the functional currency of the operation are recorded in the statements of income

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when they occur. The assets held at the Company’s Canadian and Mexican subsidiaries at September 24, 2022 were collectively, as translated to U.S. dollars, approximately 2% of total consolidated assets. Accordingly, translation gains or losses of 50% or less related to the Canadian and Mexican operations would not be material.

Item 4. Controls and Procedures

As of the end of the period covered by this quarterly report on Form 10-Q, an evaluation was carried out, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of September 24, 2022 to provide reasonable assurance that information required to be disclosed by the Company in reports that it filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There were no changes in the Company’s internal control over financial reporting during the third quarter of 2022, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

In designing and evaluating disclosure controls and procedures, Company management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitation in any control system, no evaluation or implementation of a control system can provide complete assurance that all control issues and all possible instances of fraud have been or will be detected.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Matters”

Item 1A. Risk Factors

For a discussion identifying risk factors and other important factors that could cause actual results to differ materially from those anticipated, see the discussions under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, under Part II, Item 1A, “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended March 26, 2022 and June 25, 2022, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q.

Except as set forth under Part II, Item 1A, “Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 26, 2022 and June 25, 2022, there have been no material changes to the Risk Factors described in Part I “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, as filed with the SEC.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Company

The following table provides information regarding the Company’s purchase of its common stock during the period from June 26, 2022 to September 24, 2022, the Company’s third fiscal quarter:

Fiscal Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Maximum Number of Shares That May Yet Be Purchased Under the Programs
June 25, 2022								1,603,239
June 26, 2022 – July 23, 2022		—	$	—		—		1,603,239
July 24, 2022 – August 20, 2022		12,110		146.44		12,110		1,591,129
August 21, 2022 – September 24, 2022		491,955		145.50		491,955		1,099,174
Total		504,065	$	145.52		504,065

On December 7, 2021, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,912,824 additional shares of the Company’s common stock from time to time in the open market and in privately negotiated transactions. As of September 24, 2022, the Company had authorization to purchase in the aggregate up to 1,099,174 shares of its common stock under this program. No specific expiration date has been assigned to the December 7, 2021 authorization.

Dividends

As previously disclosed in a Form 8-K filed with the SEC on July 8, 2022, Landstar entered into the Second Amended and Restated Credit Agreement, dated July 1, 2022, with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement provides for a restriction on cash dividends and other distributions to stockholders on the Company’s capital stock in the event there is a default under the Credit Agreement. In addition, the Credit Agreement, under certain circumstances, limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio, as defined in the Credit Agreement, would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed on the Exhibit Index are furnished as part of this quarterly report on Form 10-Q.

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EXHIBIT INDEX

Registrant’s Commission File No.: 0-21238

Exhibit No.	Description
(10)	Material Contracts
10.1+	Landstar System, Inc. 2022 Directors Stock Compensation Plan (Incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement filed on March 29, 2022 (Commission File No. 0-21238))
10.2	Second Amended and Restated Credit Agreement, dated as of July 1, 2022, among Landstar System Holdings, Inc., the Company, the lenders named therein, and JPMorgan Chase Bank, N.A. as Administrative Agent (including exhibits and schedules thereto). (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on July 8, 2022 (Commission File No. 0-21238))
10.3+*	Letter agreement, dated July 1, 2022, between Landstar System, Inc. and Fred L. Pensotti
(31)	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1*	Chief Executive Officer certification, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Chief Financial Officer certification, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1**	Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ management contract or compensatory plan or arrangement

* Filed herewith

** Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LANDSTAR SYSTEM, INC.
Date: October 28, 2022	/s/ James B. Gattoni
	James B. Gattoni
	President and Chief Executive Officer
Date: October 28, 2022	/s/ James P. Todd
	James P. Todd
	Vice President, Chief Financial Officer and Assistant Secretary

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EX-10.3

Exhibit 10.3

Execution Version

GENERAL RELEASE

This General Release (the “Agreement”) is hereby entered into between Federico L. Pensotti (“Executive”), and Landstar System Holdings, Inc. (the “Company”), on this 1st day of July, 2022.

WHEREAS, Executive and the Company are parties to an employment agreement dated as of May 20, 2021 (the “Employment Agreement”);

WHEREAS, pursuant to the Employment Agreement, Executive is entitled to certain severance benefits upon the execution of a general release in favor of the Company;

NOW, THEREFORE, in exchange for the good and valuable consideration set forth in Section 2 and Section 9(b) hereof, the adequacy of which is specifically acknowledged, Executive hereby agrees as follows:

1. TERMINATION OF EMPLOYMENT. By mutual agreement of the Company and Executive, Executive’s employment with the Company and each of its affiliated entities (the Company, together with such entities, collectively, the “Company Group”) terminated effective July 1, 2022 (the “Termination Date”). Executive agrees to execute any documents necessary to effectuate or memorialize such termination.

2. SEVERANCE BENEFITS. Subject to Executive having not revoked this Agreement in accordance with its terms, the Company shall provide Executive severance in the amount of equal to $831,250, which reflects the sum of (i) Executive’s annual base salary and (ii) Executive’s target annual bonus, which is equal to 75% of his annual base salary. In accordance with the terms of the Employment Agreement and subject to the execution and non-revocation of this Agreement, such amount will be paid upon the expiration of the 60-day period following the Termination Date. Executive understands and agrees that the Company shall not make any other payments or provide any other benefits to Executive, except as specifically described in this Agreement.

3. BENEFITS.

(a) Executive shall be entitled, at his own expense, to continue to participate in the Company’s group medical and health benefits plan from and after the Termination Date to the extent required under applicable law (the “COBRA Coverage”), subject to his timely electing to continue such participation and to paying any and all required premiums. Notwithstanding the foregoing, in no event should such COBRA Coverage (or the Company’s obligation to pay for such COBRA Coverage) extend beyond the time Executive qualifies for Medicare or coverage under another group benefits plan providing health care benefits (“Other Health Care Insurance Benefits”), which shall include, without limitation, eligibility for medical benefits from another employer on the basis of his employment. Executive agrees to notify the Company within 10 days of first becoming eligible for any such Other Health Care Insurance Benefits.

Execution Version

(b) Executive shall be entitled to any accrued, vested benefits available as of the Termination Date under the terms of the Company’s 401(k) retirement plan. Executive shall also be entitled to his rights in respect of any vested rights outstanding at the Termination Date awarded pursuant to the Company’s Equity Incentive Plan, as determined in accordance with the “Equity” Section of the Employment Agreement. For the avoidance of doubt, Executive acknowledges that all outstanding equity awards held by Executive that have not become vested as of the Termination Date were cancelled and forfeited for no additional consideration as of the Termination Date. Executive shall also be entitled to a one-time payment for any earned, but unused vacation days, less lawful deductions. Such amount will be paid promptly following the Termination Date.

(c) All other benefits associated with Executive’s employment, except those identified by this Agreement in Section 3(a) and Section 3(b), ceased as of the Termination Date.

(d) On or prior to the Termination Date Executive shall return all property of the Company in his possession, except Executive may keep the phone and computer provided by the Company (the “Retained Property”) subject to Executive making the Retained Property available to the Company to remove and erase Company information on or prior to the Termination Date.

4. DEFINITION OF “RELEASED PARTIES”. In this Agreement, the word “Released Parties” means each member of the Company Group (including, but not limited to, each such member by which Executive was employed); the partners, members, principals, Executives, agents, officers, directors, and shareholders of each member of the Company Group; and any person or entity which may succeed to the rights and liabilities of any of the foregoing entities or persons by assignment or otherwise.

5. RELEASE OF CLAIMS. Executive, on behalf of himself, his agents, representatives, administrators, receivers, trustees, executives, successors, heirs, designees, legal representatives, assignees, and attorneys hereby irrevocably and forever releases, discharges the Released Parties from any and all claims, demands, actions, or causes of action, of any kind or nature, past or present, known or unknown, arising out of, or in any way connected with, his employment or his separation from employment with the Company Group (“Claims”), other than Claims Executive may have for the payment or provision of the compensation and benefits described in Sections 2 and 3 of this Agreement. Executive expressly intends to release (and understands that by this Release he is releasing) all Claims of whatever kind or nature, whether presently known, unknown, suspected, or unsuspected by Executive. Executive understands and acknowledges that Executive could hereafter discover facts different from or in addition to those Executive now believes to be true with respect to the matters released in this Release, and assumes any and all risk of mistake (or discovery of additional facts) in connection with the matters giving rise to the execution of this Agreement.

Execution Version

6. EXTENT OF RELEASE. This Agreement is valid whether any claim arises under any federal, state, or local statute (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Equal Pay Act, the Fair Labor Standards Act, the Family Medical Leave Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Executive Retirement Income Security Act of 1974 (ERISA), the Florida Civil Rights Act of 1992, as amended, all Florida state and local county wage and hour statutes and orders, and all Florida state or local county employment and labor related statutes, rules, laws or regulations.), and all other statutes (including, but not limited to, any state or local statute) regulating the terms and conditions of Executive’s employment, including, but not limited to, laws pertaining to the payment of wages, the provision of benefits or insurance and the provision of workers’ compensation), regulation or ordinance, under the common law or in equity (including, but not limited to, any claims for wrongful discharge or termination, infliction of physical damage or emotional distress, or defamation), or under any policy, agreement, understanding or promise, written or oral, formal or informal, between any member of the Company Group and the Executive or otherwise adopted, promulgated or implemented by any member of the Company Group. The Release also includes, but is not limited to, any possible or potential claim pursuant to any federal, state or local whistleblower law, breach of implied or express contract, misrepresentation, wrongful discharge, or any other employment related tort, common law or contract claim, including claims for attorneys’ fees, costs, and/or expenses. The Executive intends the Release to cover and waive any and all claims to the fullest extent as permitted by any applicable law, including claims for fraud in the inducement of this Agreement.

7. CONSIDERATION. The consideration hereby provided to Executive under this Agreement is not required under the standard practices or policies of the Company Group and would not be payable under the Employment Agreement or otherwise provided to Executive but for the execution, delivery and non-revocation of this Agreement. Executive attests that he knows of no circumstances other than his agreeing to the terms of this Agreement which would require any member of the Company Group to provide him with such consideration.

8. RESTRICTIONS. Executive attests that he has not filed, nor will he initiate or cause to be initiated on his behalf, any complaint, charge, claim, or proceeding against any member of the Company Group before any local, state or federal agency, court, or other body relating to his employment or the termination thereof (each individually a “Proceeding”). Except for the right to payment of the severance benefits described in Section 2, Executive waives the right to benefit in any manner from relief, including but not limited to recovery of damages of any nature, including compensatory, general, special or punitive; costs, fees, or other expenses, including attorneys’ fees incurred in seeking recovery of damages; and non-monetary relief arising out of any Proceeding, including any EEOC proceeding. By entering into this Agreement, Executive acknowledges that he will be limiting the availability of certain remedies that he may have against the Released Parties, and also will be limiting his ability to pursue any Claims against the Released Parties.

Execution Version

9. NO DISPARAGEMENT.

(a) Executive will not, directly or indirectly, engage in any conduct (including written, oral or electronic statements or other communications to the print or electronic media) intended to embarrass, impair the reputation of or otherwise disparage any of the Released Parties, or that could reasonably be expected to embarrass, impair the reputation of or otherwise disparage any of the Released Parties in any material way; provided, that Executive shall not be precluded from taking any action or making any statement (i) to the extent required by applicable law, (ii) in the course of providing information to government officials within the scope of their regulatory or enforcement authority or (iii) to the extent necessary to accurately and truthfully respond to any legal or administrative proceeding, government investigation or similar proceeding or inquiry to which he is a party or of which he is a subject.

(b) The Company will not, directly or indirectly, engage in any conduct (including written, oral or electronic statements or other communications to the print or electronic media) intended to embarrass, impair the reputation of or otherwise disparage the Executive, or that could reasonably be expected to embarrass, impair the reputation of or otherwise disparage the Executive in any material way; provided, the Released Parties shall not be precluded from taking any action or making any statement (i) to the extent required by applicable law, (ii) in the course of providing information to government officials within the scope of their regulatory or enforcement authority or (iii) to the extent necessary to accurately and truthfully respond to any legal or administrative proceeding, government investigation or similar proceeding or inquiry to which any Released Party is a party or of which any Released Party is a subject.

10. NON-ADMISSION OF WRONGDOING. Nothing contained in this Agreement shall be deemed or construed as an admission of wrongdoing or liability on the part of the Company, any other member of the Company Group or any of the Released Parties.

11. PENALTIES. If Executive initiates or participates in any legal actions in contravention of his obligations under this Agreement, or if Executive otherwise fails to abide by any of the terms of this Agreement, including, but not limited to, Section 8 or 9 hereof, the Company and each of the member of the Company Group may reclaim any amounts paid under this Agreement, without waiving the release granted herein, and terminate any benefit or payments that are due under this Agreement, in addition to any other remedies that may be available to the Company at applicable law.

Execution Version

12. CONFIDENTIAL INFORMATION AND DEFENSE OF TRADE SECRETS ACT.

(a) Executive shall at all times protect and maintain the secrecy of the Company’s trade secrets and confidential information, including (i) the financial, operational, strategic and contractual information of the Company Group and its customers, agents, BCOs and third-party carriers, (ii) customer, agent, BCO and carrier lists, and (iii) information technology and information systems plans, strategies, formulas, patterns, compilations, programs, devices, methods, techniques, and processes, that derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from disclosure.

(b) 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

13. SEVERABILITY CLAUSE. Should any provision or part of this Agreement be found to be invalid or unenforceable, only that particular provision or part so found and not the entire Agreement shall be inoperative. If the Release contained herein is declared illegal, invalid or unenforceable, Executive agrees that the severance payable under Section 2 shall be credited against any damages to which he may be entitled from the Company or any other member of the Company Group, and treated as part of the consideration for any subsequent release that shall be executed between the Parties.

14. EVIDENCE. Executive acknowledges that this document may be used as evidence in any proceeding relating to his employment or the termination thereof. Executive waives all objections as to its form.

15. RIGHT TO COUNSEL. The Company advises Executive to consult with an attorney prior to execution of this Agreement. Executive understands that it is in his best interest to have this document reviewed by an attorney of his own choosing and at his own expense. Executive hereby acknowledges that he has been afforded a period of at least twenty-one days during which to consider this Agreement and to have this Agreement reviewed by his attorney. Executive understands that he may execute this Agreement prior to the expiration of such period, in which case he shall waive his right to utilize the full twenty-one day period to consider this Agreement. If Executive does not

Execution Version

accept this Agreement by executing this Agreement on or before 5 P.M. on the first business day following the twenty-first day following his Termination Date, Executive agrees and understands that he will forego the right to receive the severance benefits otherwise available to him under the Employment Agreement, which are contingent upon the execution, delivery and non-revocation of the release of Claims contained herein.

16. FREE WILL. Executive is entering into this Agreement of his own free will. Executive attests that no member of the Company Group nor any other Released Party has exerted any undue pressure or influence upon him. Executive has had reasonable time to determine whether entering into this Agreement is in his best interest. Executive understands and hereby acknowledges that if he requests additional time to review the provisions of this Agreement, a reasonable extension of time will be granted.

17. REVOCATION. This Agreement may be revoked by Executive within seven days after the date on which he signs this Agreement. This Agreement is not binding or enforceable until such seven day period has expired. Any revocation must be made in a signed letter executed by Executive and received by the Company at the following address no later than 5:00 p.m. Florida time on the seventh day after Executive has executed this Agreement: 13410 Sutton Park Drive, South, Jacksonville, FL 32224, Attn: General Counsel. If Executive revokes this Agreement, this Agreement will not be effective or enforceable and Executive will not be entitled to receive the severance benefits described in Section 2 of this Agreement and the commitment of the Company set forth in Section 9(b).

18. GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of Florida, applicable to contracts made and entirely to be performed therein.

19. AMENDMENT. No amendment, modification, or alteration of the terms and provisions of this Agreement shall be binding and enforceable unless the same shall be in writing, wherein specific reference is made to this Agreement, and such writing is duly executed by the Parties.

20. TAX WITHHOLDING. All payments made to Executive in accordance with the terms of the Employment Agreement and recognized under this Release, including the severance benefit payable in accordance herewith, shall be subject to reduction for all applicable federal, employment and other taxes that are required to be withheld therefrom in accordance with applicable law.

Execution Version

21. WAIVER. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof. No delay on the part of any party hereto in exercising any right, power, or privilege hereunder shall operate as a waiver thereof.

22. SUCCESSORS; THIRD-PARTY BENEFICIARIES. This Agreement shall be binding upon the Parties hereto and their respective successors, transferees, and assigns. This Agreement shall also inure to the benefit of all the Released Parties and their respective heirs, administrators, representatives, executors, successors and assigns.

	FEDERICO L. PENSOTTI
Dated: July 1, 2022	/s/ Federico L. Pensotti
	LANDSTAR SYSTEM HOLDINGS, INC.
Dated: July 1, 2022	/s/ Michael K. Kneller
	Name: Michael K. Kneller
	Title:   Vice President, General Counsel & Secretary

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, James B. Gattoni, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Landstar System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 28, 2022

/s/ James B. Gattoni

James B. Gattoni

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, James P. Todd, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Landstar System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 28, 2022

/s/ James P. Todd

James P. Todd

Vice President, Chief Financial Officer and Assistant Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Landstar System, Inc. (the “Company”) on Form 10-Q for the period ending September 24, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James B. Gattoni, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 28, 2022

/s/ James B. Gattoni

James B. Gattoni

President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Landstar System, Inc. (the “Company”) on Form 10-Q for the period ending September 24, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Todd, Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 28, 2022

/s/ James P. Todd

James P. Todd

Vice President, Chief Financial Officer and Assistant Secretary

XML

Cover Page - shares	9 Months Ended
	Sep. 24, 2022	Oct. 17, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Entity Central Index Key	0000853816
Document Transition Report	false
Current Fiscal Year End Date	--12-31
Document Period End Date	Sep. 24, 2022
Entity Registrant Name	LANDSTAR SYSTEM, INC.
Entity Filer Category	Large Accelerated Filer
Trading Symbol	LSTR
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		35,925,265
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	0-21238
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	06-1313069
Entity Address, Address Line One	13410 Sutton Park Drive South
Entity Address, City or Town	Jacksonville
Entity Address, Postal Zip Code	32224
City Area Code	904
Local Phone Number	398-9400
Entity Address, State or Province	FL

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Current Assets
Cash and cash equivalents	$ 177,796	$ 215,522
Short-term investments	50,637	35,778
Trade accounts receivable, less allowance of $10,464 and $7,074	1,133,681	1,154,314
Other receivables, including advances to independent contractors, less allowance of $9,877 and $8,125	87,241	101,124
Other current assets	35,493	16,162
Total current assets	1,484,848	1,522,900
Operating property, less accumulated depreciation and amortization of $383,458 and $344,099	321,585	317,386
Goodwill	41,004	40,768
Other assets	141,103	164,411
Total assets	1,988,540	2,045,465
Current Liabilities
Cash overdraft	97,686	116,478
Accounts payable	644,054	604,130
Current maturities of long-term debt	37,375	36,561
Insurance claims	58,131	46,896
Dividends payable		75,387
Other current liabilities	104,272	130,531
Total current liabilities	941,518	1,009,983
Long-term debt, excluding current maturities	72,095	75,243
Insurance claims	55,765	49,509
Deferred income taxes and other noncurrent liabilities	45,989	48,720
Shareholders' Equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,380,565 and 68,232,975 shares	684	682
Additional paid-in capital	255,486	255,148
Retained earnings	2,625,290	2,317,184
Cost of 32,455,300 and 30,539,235 shares of common stock in treasury	(1,992,886)	(1,705,601)
Accumulated other comprehensive loss	(15,401)	(5,403)
Total shareholders' equity	873,173	862,010
Total liabilities and shareholders' equity	$ 1,988,540	$ 2,045,465

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Allowance on trade accounts receivable	$ 10,464	$ 7,074
Allowance on other receivables	9,877	8,125
Accumulated depreciation and amortization on operating property	$ 383,458	$ 344,099
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	160,000,000	160,000,000
Common stock, issued shares	68,380,565	68,232,975
Treasury stock, shares	32,455,300	30,539,235

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Revenue	$ 1,816,132	$ 1,734,299	$ 5,761,795	$ 4,592,551
Investment income	716	706	2,023	2,138
Costs and expenses:
Purchased transportation	1,416,323	1,356,671	4,512,341	3,583,197
Commissions to agents	154,125	135,295	465,759	356,997
Other operating costs, net of gains on asset sales/dispositions	13,356	10,572	34,878	27,117
Insurance and claims	31,445	29,569	96,265	75,198
Selling, general and administrative	53,519	59,198	165,199	158,720
Depreciation and amortization	14,582	12,288	42,627	36,532
Total costs and expenses	1,683,350	1,603,593	5,317,069	4,237,761
Operating income	133,498	131,412	446,749	356,928
Interest and debt expense	1,047	965	3,275	2,974
Income before income taxes	132,451	130,447	443,474	353,954
Income taxes	32,233	31,772	105,862	85,745
Net income	$ 100,218	$ 98,675	$ 337,612	$ 268,209
Diluted earnings per share	$ 2.76	$ 2.58	$ 9.15	$ 7
Average diluted shares outstanding	36,334,000	38,218,000	36,886,000	38,342,000
Dividends per common share	$ 0.3	$ 0.25	$ 0.8	$ 0.67

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Net income	$ 100,218	$ 98,675	$ 337,612	$ 268,209
Other comprehensive (loss) income:
Unrealized holding losses on available-for-sale investments, net of tax benefit of $2,461, $347, $436 and $104	(1,596)	(377)	(8,987)	(1,260)
Foreign currency translation (losses) gains	(1,484)	(710)	(1,011)	320
Other comprehensive loss	(3,080)	(1,087)	(9,998)	(940)
Comprehensive income	$ 97,138	$ 97,588	$ 327,614	$ 267,269

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Unrealized holding losses on available-for-sale investments, net of tax benefit	$ 436	$ 104	$ 2,461	$ 347

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
OPERATING ACTIVITIES
Net income	$ 337,612	$ 268,209
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	42,627	36,532
Non-cash interest charges	290	336
Provisions for losses on trade and other accounts receivable	8,346	3,884
Gains on sales/disposals of operating property	(1,290)	(1,259)
Deferred income taxes, net	(2,597)	4,948
Stock-based compensation	9,409	18,717
Changes in operating assets and liabilities:
Decrease (increase) in trade and other accounts receivable	26,170	(224,503)
Increase in other assets	(17,669)	(3,822)
Increase in accounts payable	39,924	167,880
(Decrease) increase in other liabilities	(23,932)	22,837
Increase (decrease) in insurance claims	17,491	(76,769)
NET CASH PROVIDED BY OPERATING ACTIVITIES	436,381	216,990
INVESTING ACTIVITIES
Sales and maturities of investments	27,568	25,521
Purchases of investments	(30,490)	(77,649)
Purchases of operating property	(21,096)	(18,561)
Proceeds from sales of operating property	2,669	2,047
Purchase of non-marketable securities	(4,999)
NET CASH USED BY INVESTING ACTIVITIES	(26,348)	(68,642)
FINANCING ACTIVITIES
(Decrease) increase in cash overdraft	(18,792)	14,210
Dividends paid	(104,893)	(102,463)
Payment for debt issue costs	(1,080)
Proceeds from exercises of stock options	56	134
Taxes paid in lieu of shares issued related to stock-based compensation plans	(10,427)	(2,342)
Purchases of common stock	(285,983)	(50,230)
Principal payments on finance lease obligations	(29,075)	(26,513)
Payment of deferred consideration		(168)
NET CASH USED BY FINANCING ACTIVITIES	(450,194)	(167,372)
Effect of exchange rate changes on cash and cash equivalents	(1,614)	234
Decrease in cash, cash equivalents and restricted cash	(41,775)	(18,790)
Cash, cash equivalents and restricted cash at beginning of period	219,571	249,354
Cash and cash equivalents at end of period	$ 177,796	$ 230,564

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock at Cost	Accumulated Other Comprehensive (Loss) Income
Beginning Balance (in shares) at Dec. 26, 2020		68,183,702			29,797,639
Beginning Balance at Dec. 26, 2020	$ 691,835	$ 682	$ 228,875	$ 2,046,238	$ (1,581,961)	$ (1,999)
Net income	77,240			77,240
Dividends	(8,067)			(8,067)
Issuance of stock related to stock-based compensation plans (in shares)		28,594			6,087
Issuance of stock related to stock-based compensation plans	(1,164)		(307)		$ (857)
Stock-based compensation	4,029		4,029
Other comprehensive (loss) income	(954)					(954)
Ending Balance (in shares) at Mar. 27, 2021		68,212,296			29,803,726
Ending Balance at Mar. 27, 2021	762,919	$ 682	232,597	2,115,411	$ (1,582,818)	(2,953)
Beginning Balance (in shares) at Dec. 26, 2020		68,183,702			29,797,639
Beginning Balance at Dec. 26, 2020	691,835	$ 682	228,875	2,046,238	$ (1,581,961)	(1,999)
Net income	268,209
Ending Balance (in shares) at Sep. 25, 2021		68,231,013			30,122,427
Ending Balance at Sep. 25, 2021	899,690	$ 682	246,302	2,288,754	$ (1,633,109)	(2,939)
Beginning Balance (in shares) at Mar. 27, 2021		68,212,296			29,803,726
Beginning Balance at Mar. 27, 2021	762,919	$ 682	232,597	2,115,411	$ (1,582,818)	(2,953)
Net income	92,294			92,294
Dividends	(8,068)			(8,068)
Purchases of common stock (in shares)					150,000
Purchases of common stock	(23,837)				$ (23,837)
Issuance of stock related to stock-based compensation plans (in shares)		17,584			355
Issuance of stock related to stock-based compensation plans	(1,100)		(1,039)		$ (61)
Stock-based compensation	6,864		6,864
Other comprehensive (loss) income	1,101					1,101
Ending Balance (in shares) at Jun. 26, 2021		68,229,880			29,954,081
Ending Balance at Jun. 26, 2021	830,173	$ 682	238,422	2,199,637	$ (1,606,716)	(1,852)
Net income	98,675			98,675
Dividends	(9,558)			(9,558)
Purchases of common stock (in shares)					167,046
Purchases of common stock	(26,393)				$ (26,393)
Issuance of stock related to stock-based compensation plans (in shares)		1,133			1,300
Issuance of stock related to stock-based compensation plans	56	$ 0	56		$ 0
Stock-based compensation	7,824		7,824
Other comprehensive (loss) income	(1,087)					(1,087)
Ending Balance (in shares) at Sep. 25, 2021		68,231,013			30,122,427
Ending Balance at Sep. 25, 2021	899,690	$ 682	246,302	2,288,754	$ (1,633,109)	(2,939)
Beginning Balance (in shares) at Dec. 25, 2021		68,232,975			30,539,235
Beginning Balance at Dec. 25, 2021	862,010	$ 682	255,148	2,317,184	$ (1,705,601)	(5,403)
Net income	124,839			124,839
Dividends	(9,324)			(9,324)
Purchases of common stock (in shares)					693,550
Purchases of common stock	(109,332)				$ (109,332)
Issuance of stock related to stock-based compensation plans (in shares)		137,176			10,033
Issuance of stock related to stock-based compensation plans	(10,127)	$ 2	(8,913)		$ (1,216)
Stock-based compensation	1,995		1,995
Other comprehensive (loss) income	(3,912)					(3,912)
Ending Balance (in shares) at Mar. 26, 2022		68,370,151			31,242,818
Ending Balance at Mar. 26, 2022	856,149	$ 684	248,230	2,432,699	$ (1,816,149)	(9,315)
Beginning Balance (in shares) at Dec. 25, 2021		68,232,975			30,539,235
Beginning Balance at Dec. 25, 2021	862,010	$ 682	255,148	2,317,184	$ (1,705,601)	(5,403)
Net income	337,612
Ending Balance (in shares) at Sep. 24, 2022		68,380,565			32,455,300
Ending Balance at Sep. 24, 2022	873,173	$ 684	255,486	2,625,290	$ (1,992,886)	(15,401)
Beginning Balance (in shares) at Mar. 26, 2022		68,370,151			31,242,818
Beginning Balance at Mar. 26, 2022	856,149	$ 684	248,230	2,432,699	$ (1,816,149)	(9,315)
Net income	112,555			112,555
Dividends	(9,257)			(9,257)
Purchases of common stock (in shares)					703,211
Purchases of common stock	(103,300)				$ (103,300)
Issuance of stock related to stock-based compensation plans (in shares)		6,783			587
Issuance of stock related to stock-based compensation plans	(86)				$ (86)
Stock-based compensation	3,815		3,815
Other comprehensive (loss) income	(3,006)					(3,006)
Ending Balance (in shares) at Jun. 25, 2022		68,376,934			31,946,616
Ending Balance at Jun. 25, 2022	856,870	$ 684	252,045	2,535,997	$ (1,919,535)	(12,321)
Net income	100,218			100,218
Dividends	(10,925)			(10,925)
Purchases of common stock (in shares)					504,065
Purchases of common stock	(73,351)				$ (73,351)
Issuance of stock related to stock-based compensation plans (in shares)		3,631			4,619
Issuance of stock related to stock-based compensation plans	(158)	$ 0	(158)		$ 0
Stock-based compensation	3,599		3,599
Other comprehensive (loss) income	(3,080)					(3,080)
Ending Balance (in shares) at Sep. 24, 2022		68,380,565			32,455,300
Ending Balance at Sep. 24, 2022	$ 873,173	$ 684	$ 255,486	$ 2,625,290	$ (1,992,886)	$ (15,401)

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Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended						9 Months Ended
	Sep. 24, 2022	Jun. 25, 2022	Mar. 26, 2022	Sep. 25, 2021	Jun. 26, 2021	Mar. 27, 2021	Sep. 24, 2022	Sep. 25, 2021
Dividends per common share	$ 0.3	$ 0.25	$ 0.25	$ 0.25	$ 0.21	$ 0.21	$ 0.8	$ 0.67

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Significant Accounting Policies

9 Months Ended

Sep. 24, 2022

Significant Accounting Policies

(1) Significant Accounting Policies

Revenue from Contracts with Customers – Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers generated by equipment type during the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021 (dollars in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
Mode	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Truck – BCO Independent Contractors		35	%		41	%		35	%		40	%
Truck – Truck Brokerage Carriers		53	%		50	%		53	%		51	%
Rail intermodal		2	%		3	%		2	%		3	%
Ocean and air cargo carriers		8	%		4	%		9	%		5	%
Truck Equipment Type
Van equipment	$	3,022,297		$	2,502,025		$	914,154		$	918,115
Unsided/platform equipment	$	1,336,956		$	1,112,358		$	453,924		$	422,979
Less-than-truckload	$	105,994		$	85,551		$	35,343		$	30,819
Other truck transportation (1)	$	632,001		$	518,472		$	195,345		$	208,817

(1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

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Share-based Payment Arrangements

9 Months Ended

Sep. 24, 2022

Share-based Payment Arrangements

(2) Share-based Payment Arrangements

As of September 24, 2022, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”). The Company also has a stock compensation plan for members of its Board of Directors, the 2022 Directors Stock Compensation Plan (the “2022 DSCP”), which replaced the Amended and Restated 2013 Directors Stock Compensation Plan (as amended and restated, the “2013 DSCP”). At the Company’s 2022 Annual Meeting of Stockholders held on May 11, 2022, the Company’s stockholders approved the 2022 DSCP. The provisions of the 2022 DSCP are substantially similar to the provisions of the 2013 DSCP. 6,000,000 shares of the Company’s common stock were authorized for issuance under the 2011 EIP, and 200,000 shares of the Company’s common stock were authorized for issuance under the 2022 DSCP. No further grants can be made under the 2013 DSCP, including 56,502 shares of the Company’s common stock previously reserved for issuance, but not issued, under the 2013 DSCP. The 2011 EIP, 2013 DSCP and 2022 DSCP are each referred to herein as a “Plan,” and, collectively, as the “Plans.” Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Total cost of the Plans during the period	$	9,409		$	18,717		$	3,599		$	7,824
Amount of related income tax benefit recognized during the period		(5,219	)		(5,636	)		(949	)		(1,919	)
Net cost of the Plans during the period	$	4,190		$	13,081		$	2,650		$	5,905

Included in income tax benefits recognized in the thirty-nine-week periods ended September 24, 2022 and September 25, 2021 were excess tax benefits from stock-based awards of $2,910,000 and $1,039,000 respectively.

As of September 24, 2022, there were 193,217 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 3,245,251 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

The following table summarizes information regarding the Company’s outstanding restricted stock unit (“RSU”) awards with either a performance condition or a market condition under the Plans:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding at December 25, 2021		209,399		$	102.90
Granted		49,825		$	139.54
Shares earned in excess of target (1)		91,497		$	92.58
Vested shares, including shares earned in excess of target		(177,146	)	$	95.48
Forfeited		(21,989	)	$	113.85
Outstanding at September 24, 2022		151,586		$	115.80

(1) Represents additional shares earned under each of the February 2, 2017, February 2, 2018 and February 1, 2019 RSU awards, as fiscal year 2021 financial results exceeded target performance level under each such award.

During the thirty-nine-week period ended September 24, 2022, the Company granted RSUs with a performance condition. Outstanding RSUs at both December 25, 2021 and September 24, 2022 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2021 Annual Report on Form 10-K.

RSUs with a performance condition granted on January 28, 2022 may vest on January 31 of 2025, 2026 and 2027 based on growth in operating income and pre-tax income per diluted share from continuing operations as compared to the results from the 2021 fiscal year.

The Company recognized approximately $7,035,000 and $16,223,000 of share-based compensation expense related to RSU awards in the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, respectively. As of September 24, 2022, there was a maximum of $19.7 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.6 years. With respect to RSU awards with a performance condition, the amount of future compensation expense to be recognized will be determined based on future operating results.

Non-vested Restricted Stock and Deferred Stock Units

The following table summarizes information regarding the Company’s outstanding shares of non-vested restricted stock and Deferred Stock Units (defined below) under the Plans:

	Number of Shares and Deferred Stock Units			Weighted Average Grant Date Fair Value
Non-vested at December 25, 2021		56,436		$	125.16
Granted		25,354		$	152.54
Vested		(27,074	)	$	122.68
Forfeited		(6,921	)	$	144.45
Non-vested at September 24, 2022		47,795		$	138.30

The fair value of each share of non-vested restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant. Shares of non-vested restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100% on the first or fifth anniversary of the date of the grant. For restricted stock awards granted under the 2022 DSCP, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of recipient separation from service from the Board of Directors, or, if earlier, upon a change in control event of the Company. Deferred Stock Units become vested 100% on the first anniversary of the date of the grant. Deferred Stock Units do not represent actual ownership in shares of the Company’s common stock and the recipient does not have voting rights or other incidents of ownership until the shares are issued. However, Deferred Stock Units do contain the right to receive dividend equivalent payments prior to settlement into shares.

As of September 24, 2022, there was $4,375,000 of total unrecognized compensation cost related to non-vested shares of restricted stock and Deferred Stock Units granted under the Plans. The unrecognized compensation cost related to these non-vested shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 1.9 years.

Stock Options

The following table summarizes information regarding the Company’s outstanding stock options under the Plans:

	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (000s)
Options outstanding at December 25, 2021		8,570		$	55.42
Exercised		(4,100	)	$	54.36
Options outstanding at September 24, 2022		4,470		$	56.40		0.4	$	386
Options exercisable at September 24, 2022		4,470		$	56.40		0.4	$	386

The total intrinsic value of stock options exercised during the thirty-nine-week periods ended September 24, 2022 and September 25, 2021 was $429,000 and $644,000, respectively.

As of September 24, 2022, there was no unrecognized compensation cost related to stock options granted under the Plans.

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Income Taxes

9 Months Ended

Sep. 24, 2022

Income Taxes

(3) Income Taxes

The provisions for income taxes for the 2022 and 2021 thirty-nine-week periods were based on estimated annual effective income tax rates of 24.5% and 24.4%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The estimated annual effective income tax rate was higher than the statutory federal income tax rate of 21% in both periods primarily attributable to state taxes and non-deductible executive compensation. The effective income tax rate for the 2022 thirty-nine-week period was 23.9%, which was lower than the estimated annual effective income tax rate of 24.5%, primarily attributable to excess tax benefits realized on stock-based awards. The effective income tax rate for the 2021 thirty-nine-week period was 24.2%, which was lower than the estimated annual effective income tax rate of 24.4% primarily attributable to excess tax benefits realized on stock-based awards.

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Earnings Per Share

9 Months Ended

Sep. 24, 2022

Earnings Per Share

(4) Earnings Per Share

Earnings per common share are based on the weighted average number of shares outstanding, including outstanding non-vested restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares and Deferred Stock Units outstanding plus the incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options. During the 2022 and 2021 thirty-nine-week and thirteen-week periods, in reference to the determination of diluted earnings per share, the future compensation cost attributable to outstanding shares of non-vested restricted stock exceeded the impact of incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options.

For each of the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, no options outstanding to purchase shares of common stock were antidilutive. Outstanding RSUs were excluded from the calculation of diluted earnings per share for all periods because the performance metric requirements or market condition for vesting had not been satisfied.

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Additional Cash Flow Information

9 Months Ended

Sep. 24, 2022

Additional Cash Flow Information

(5) Additional Cash Flow Information

During the 2022 thirty-nine-week period, Landstar paid income taxes and interest of $125,690,000 and $3,101,000, respectively. During the 2021 thirty-nine-week period, Landstar paid income taxes and interest of $71,823,000 and $2,780,000, respectively. Landstar acquired operating property by entering into finance leases in the amount of $26,741,000 and $23,080,000 in the 2022 and 2021 thirty-nine-week periods, respectively.

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Segment Information

9 Months Ended

Sep. 24, 2022

Segment Information

(6) Segment Information

The following table summarizes information about the Company’s reportable business segments as of and for the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021:

	Thirty Nine Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	5,702,959	$	58,836	$	5,761,795	$	4,539,561	$	52,990	$	4,592,551
Internal revenue				65,753		65,753				53,028		53,028
Investment income				2,023		2,023				2,138		2,138
Operating income		412,054		34,695		446,749		323,370		33,558		356,928
Expenditures on long-lived assets		21,096				21,096		18,561				18,561
Goodwill		41,004				41,004		40,980				40,980
	Thirteen Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	1,796,401	$	19,731	$	1,816,132	$	1,716,004	$	18,295	$	1,734,299
Internal revenue				12,883		12,883				9,533		9,533
Investment income				716		716				706		706
Operating income		120,164		13,334		133,498		123,410		8,002		131,412
Expenditures on long-lived assets		13,629				13,629		9,561				9,561

In the thirty-nine-week periods ended September 24, 2022 and September 25, 2021, no single customer accounted for more than 10% of the Company’s consolidated revenue.

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Other Comprehensive Income

9 Months Ended

Sep. 24, 2022

Other Comprehensive Income

(7) Other Comprehensive Income

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the thirty-nine-week period ended September 24, 2022 (in thousands):

	Unrealized Holding Gains (Losses) on Available-for-Sale Securities			Foreign Currency Translation			Total
Balance as of December 25, 2021	$	113		$	(5,516	)	$	(5,403	)
Other comprehensive loss		(8,987	)		(1,011	)		(9,998	)
Balance as of September 24, 2022	$	(8,874	)	$	(6,527	)	$	(15,401	)

Amounts reclassified from accumulated other comprehensive income to investment income due to the realization of previously unrealized gains and losses in the accompanying consolidated statements of income were not significant for the thirty-nine-week period ended September 24, 2022.

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Investments

9 Months Ended

Sep. 24, 2022

Investments

(8) Investments

Investments include primarily investment-grade corporate bonds and asset-backed securities having maturities of up to five years (the “bond portfolio”) and money market investments. Investments in the bond portfolio are reported as available-for-sale and are carried at fair value. Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets. Management performs an analysis of the nature of the unrealized losses on available-for-sale investments to determine whether an allowance for credit loss is necessary. Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of noncredit-related factors are to be included as a component of shareholders’ equity. Investments whose values are based on quoted market prices in active markets are classified within Level 1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Any transfers between levels are recognized as of the beginning of any reporting period. Fair value of the bond portfolio was determined using Level 1 inputs related to U.S. Treasury obligations and money market investments and Level 2 inputs related to investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies. Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $11,304,000 at September 24, 2022, while unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $144,000 at December 25, 2021.

The amortized cost and fair values of available-for-sale investments are as follows at September 24, 2022 and December 25, 2021 (in thousands):    

			Gross		Gross
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 24, 2022
Money market investments	$	22,062	$	—	$	—	$	22,062
Asset-backed securities		19,742		—		2,666		17,076
Corporate bonds and direct obligations of government agencies		129,250		—		8,536		120,714
U.S. Treasury obligations		2,344		—		102		2,242
Total	$	173,398	$	—	$	11,304	$	162,094
December 25, 2021
Money market investments	$	8,750	$	—	$	—	$	8,750
Asset-backed securities		22,441		—		346		22,095
Corporate bonds and direct obligations of government agencies		137,916		1,406		966		138,356
U.S. Treasury obligations		2,342		50		—		2,392
Total	$	171,449	$	1,456	$	1,312	$	171,593

For those available-for-sale investments with unrealized losses at September 24, 2022 and December 25, 2021, the following table summarizes the duration of the unrealized loss (in thousands):

	Less than 12 months				12 months or longer						Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
September 24, 2022
Asset-backed securities	$	3,224	$	453	$	13,852	$	2,213	$	17,076	$	2,666
Corporate bonds and direct obligations of government agencies		68,854		2,732		51,860		5,804		120,714		8,536
U.S. Treasury obligations		2,242		102		—		—		2,242		102
Total	$	74,320	$	3,287	$	65,712	$	8,017	$	140,032	$	11,304
December 25, 2021
Asset-backed securities	$	22,095	$	346	$	—	$	—	$	22,095	$	346
Corporate bonds and direct obligations of government agencies		72,526		966		—		—		72,526		966
Total	$	94,621	$	1,312	$	—	$	—	$	94,621	$	1,312

The Company believes unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality. The Company expects to recover, through collection of all of the contractual cash flows of each security, the amortized cost basis of these securities as it does not intend to sell, and does not anticipate being required to sell, these securities before recovery of the cost basis. For these reasons, no losses have been recognized in the Company’s consolidated statements of income.

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Leases

9 Months Ended

Sep. 24, 2022

Leases

(9) Leases

Landstar’s noncancelable leases are primarily comprised of finance leases for the acquisition of new trailing equipment. Each finance lease for the acquisition of trailing equipment is a five year lease with a $1 purchase option for the applicable equipment at lease expiration. Substantially all of Landstar’s operating lease right-of-use assets and operating lease liabilities represent leases for facilities maintained in support of the Company’s network of BCO Independent Contractors and office space used to conduct Landstar’s business.

These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further, the leases do not contain contingent rent provisions. Landstar also rents certain trailing equipment to supplement the Company-owned trailer fleet under “month-to-month” lease terms, which are not required to be recorded on the balance sheet due to the less than twelve month lease term exemption. Sublease income is primarily comprised of weekly trailing equipment rentals to BCO Independent Contractors.

Most of Landstar’s operating leases include one or more options to renew. The exercise of lease renewal options is typically at Landstar’s sole discretion, and, as such, the majority of renewals to extend the lease terms are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. Landstar regularly evaluates the renewal options, and when they are reasonably certain of exercise, Landstar includes the renewal period in the lease term.

As most of Landstar’s operating leases do not provide an implicit rate, Landstar utilized its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. Landstar has a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, the Company applies a portfolio approach for determining the incremental borrowing rate.

The components of lease cost for finance leases and operating leases for the thirty nine weeks ended September 24, 2022 were (in thousands):

Finance leases:
Amortization of right-of-use assets	$	16,455
Interest on lease liability		2,117
Total finance lease cost		18,572
Operating leases:
Lease cost		2,587
Variable lease cost		—
Sublease income		(3,711	)
Total net operating lease income		(1,124	)
Total net lease cost	$	17,448

A summary of the lease classification on our consolidated balance sheet as of September 24, 2022 is as follows (in thousands):

Assets:

Operating lease right-of-use assets	Other assets	$	1,628
Finance lease assets	Operating property, less accumulated depreciation and amortization		146,903
Total lease assets		$	148,531

Liabilities:

The following table reconciles the undiscounted cash flows for the finance and operating leases to the finance and operating lease liabilities recorded on the balance sheet at September 24, 2022 (in thousands):

	Finance Leases		Operating Leases
2022 Remainder	$	10,680	$	194
2023		37,822		705
2024		27,969		542
2025		21,771		285
2026		13,633		—
Thereafter		3,214		—
Total future minimum lease payments		115,089		1,726
Less amount representing interest (1.6% to 4.6%)		5,619		98
Present value of minimum lease payments	$	109,470	$	1,628
Current maturities of long-term debt		37,375
Long-term debt, excluding current maturities		72,095
Other current liabilities				715
Deferred income taxes and other noncurrent liabilities				913

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of September 24, 2022 were:

	Finance Leases			Operating Leases
Weighted average remaining lease term (years)		3.5			2.6
Weighted average discount rate		2.9	%		4.5	%

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Debt

9 Months Ended

Sep. 24, 2022

Debt

(10) Debt

Other than finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of September 24, 2022 and December 25, 2021.

On August 18, 2020, Landstar entered into an amended and restated credit agreement with a syndicate of banks and JPMorgan Chase Bank, N.A., as administrative agent (the “First Amended and Restated Credit Agreement”).

As previously disclosed in a Form 8-K filed with the SEC on July 8, 2022, Landstar entered into a second amended and restated credit agreement, dated July 1, 2022, with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Second Amended and Restated Credit Agreement”) that superseded and replaced the First Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement, which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $300,000,000, $45,000,000 of which may be utilized in the form of letters of credit. The Second Amended and Restated Credit Agreement also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $600,000,000.

The Second Amended and Restated Credit Agreement, which superseded and replaced the First Amended and Restated Credit Agreement, is referred to herein as the “Credit Agreement.” As of September 24, 2022, there were no borrowings outstanding under the revolving credit facility of the Credit Agreement.

The revolving credit loans under the Credit Agreement, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10% and an applicable margin ranging from 1.25% to 2.00%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.00%, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. The revolving credit facility bears a commitment fee, payable quarterly in arrears, of 0.20% to 0.30%, based on the Company’s Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.

The Credit Agreement contains a number of covenants that limit, among other things, the incurrence of additional indebtedness. The Company is required to, among other things, maintain a minimum fixed charge coverage ratio, as described in the Credit Agreement, and maintain a Leverage Ratio, as defined in the Credit Agreement, below a specified maximum. The Credit Agreement provides for a restriction on cash dividends and other distributions to stockholders on the Company’s capital stock to the extent there is a default under the Credit Agreement. In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter. The Credit Agreement provides for an event of default in the event that, among other things, a person or group acquires 35% or more of the outstanding capital stock of the Company or obtains power to elect a majority of the Company’s directors or the directors cease to consist of a majority of Continuing Directors, as defined in the Credit Agreement. None of these covenants are presently considered by management to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement.

The interest rates on borrowings under the revolving credit facility are typically tied to short-term interest rates and, as such, carrying value approximates fair value. Interest rates on borrowings under finance leases approximate the interest rates that would currently be available to the Company under similar terms and, as such, carrying value approximates fair value.

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Commitments and Contingencies

9 Months Ended

Sep. 24, 2022

Commitments and Contingencies

(11) Commitments and Contingencies

Short-term investments include $50,637,000 in current maturities of investments held by the Company’s insurance segment at September 24, 2022. The non-current portion of the bond portfolio of $111,457,000 is included in other assets. The short-term investments, together with $34,437,000 of non-current investments, provide collateral for the $76,567,000 of letters of credit issued to guarantee payment of insurance claims. As of September 24, 2022, Landstar also had $33,493,000 of additional letters of credit outstanding under the Credit Agreement.

The Company is involved in certain claims and pending litigation arising from the normal conduct of business. Many of these claims are covered in whole or in part by insurance. Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.

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Equity Investment

9 Months Ended

Sep. 24, 2022

Equity Securities without Readily Determinable Fair Value, Annual Amount [Abstract]

Equity investment

(12) Equity investment

On April 1, 2022, Landstar Investment Holdco, LLC, a newly formed Delaware LLC and wholly owned subsidiary of Landstar System Holdings, Inc., purchased Class A units of Cavnue, LLC, for approximately $4,999,000 in cash consideration. Cavnue, LLC is a privately held company focused on combining technology and road infrastructure to unlock the full potential of connected and autonomous vehicles.

This non-controlling investment in units of Cavnue, LLC, is considered an investment in non-marketable equity securities without a readily determinable market value. The carrying value of our non-marketable equity securities going forward will be adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative).

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 24, 2022

Revenue from Contracts with Customers – Disaggregation of Revenue

Revenue from Contracts with Customers – Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers generated by equipment type during the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021 (dollars in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
Mode	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Truck – BCO Independent Contractors		35	%		41	%		35	%		40	%
Truck – Truck Brokerage Carriers		53	%		50	%		53	%		51	%
Rail intermodal		2	%		3	%		2	%		3	%
Ocean and air cargo carriers		8	%		4	%		9	%		5	%
Truck Equipment Type
Van equipment	$	3,022,297		$	2,502,025		$	914,154		$	918,115
Unsided/platform equipment	$	1,336,956		$	1,112,358		$	453,924		$	422,979
Less-than-truckload	$	105,994		$	85,551		$	35,343		$	30,819
Other truck transportation (1)	$	632,001		$	518,472		$	195,345		$	208,817

(1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers generated by equipment type during the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021 (dollars in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
Mode	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Truck – BCO Independent Contractors		35	%		41	%		35	%		40	%
Truck – Truck Brokerage Carriers		53	%		50	%		53	%		51	%
Rail intermodal		2	%		3	%		2	%		3	%
Ocean and air cargo carriers		8	%		4	%		9	%		5	%
Truck Equipment Type
Van equipment	$	3,022,297		$	2,502,025		$	914,154		$	918,115
Unsided/platform equipment	$	1,336,956		$	1,112,358		$	453,924		$	422,979
Less-than-truckload	$	105,994		$	85,551		$	35,343		$	30,819
Other truck transportation (1)	$	632,001		$	518,472		$	195,345		$	208,817

(1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

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Share-based Payment Arrangements (Tables)

9 Months Ended

Sep. 24, 2022

Amounts Recognized in Financial Statements with Respect to Plans

Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Total cost of the Plans during the period	$	9,409		$	18,717		$	3,599		$	7,824
Amount of related income tax benefit recognized during the period		(5,219	)		(5,636	)		(949	)		(1,919	)
Net cost of the Plans during the period	$	4,190		$	13,081		$	2,650		$	5,905

Schedule of Information on Restricted Stock Units

The following table summarizes information regarding the Company’s outstanding restricted stock unit (“RSU”) awards with either a performance condition or a market condition under the Plans:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding at December 25, 2021		209,399		$	102.90
Granted		49,825		$	139.54
Shares earned in excess of target (1)		91,497		$	92.58
Vested shares, including shares earned in excess of target		(177,146	)	$	95.48
Forfeited		(21,989	)	$	113.85
Outstanding at September 24, 2022		151,586		$	115.80

(1) Represents additional shares earned under each of the February 2, 2017, February 2, 2018 and February 1, 2019 RSU awards, as fiscal year 2021 financial results exceeded target performance level under each such award.

Schedule of Information on Non-Vested Restricted Stock and Deferred Stock Units

The following table summarizes information regarding the Company’s outstanding shares of non-vested restricted stock and Deferred Stock Units (defined below) under the Plans:

	Number of Shares and Deferred Stock Units			Weighted Average Grant Date Fair Value
Non-vested at December 25, 2021		56,436		$	125.16
Granted		25,354		$	152.54
Vested		(27,074	)	$	122.68
Forfeited		(6,921	)	$	144.45
Non-vested at September 24, 2022		47,795		$	138.30

Summary of Information Regarding Stock Options

The following table summarizes information regarding the Company’s outstanding stock options under the Plans:

	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (000s)
Options outstanding at December 25, 2021		8,570		$	55.42
Exercised		(4,100	)	$	54.36
Options outstanding at September 24, 2022		4,470		$	56.40		0.4	$	386
Options exercisable at September 24, 2022		4,470		$	56.40		0.4	$	386

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Segment Information (Tables)

9 Months Ended

Sep. 24, 2022

Information Regarding Reportable Business Segments

The following table summarizes information about the Company’s reportable business segments as of and for the thirty-nine-week and thirteen-week periods ended September 24, 2022 and September 25, 2021:

	Thirty Nine Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	5,702,959	$	58,836	$	5,761,795	$	4,539,561	$	52,990	$	4,592,551
Internal revenue				65,753		65,753				53,028		53,028
Investment income				2,023		2,023				2,138		2,138
Operating income		412,054		34,695		446,749		323,370		33,558		356,928
Expenditures on long-lived assets		21,096				21,096		18,561				18,561
Goodwill		41,004				41,004		40,980				40,980
	Thirteen Weeks Ended
	September 24, 2022						September 25, 2021
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance		Total
External revenue	$	1,796,401	$	19,731	$	1,816,132	$	1,716,004	$	18,295	$	1,734,299
Internal revenue				12,883		12,883				9,533		9,533
Investment income				716		716				706		706
Operating income		120,164		13,334		133,498		123,410		8,002		131,412
Expenditures on long-lived assets		13,629				13,629		9,561				9,561

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 24, 2022

Components of and Changes in Accumulated Other Comprehensive Income, Net of Related Income Taxes

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the thirty-nine-week period ended September 24, 2022 (in thousands):

	Unrealized Holding Gains (Losses) on Available-for-Sale Securities			Foreign Currency Translation			Total
Balance as of December 25, 2021	$	113		$	(5,516	)	$	(5,403	)
Other comprehensive loss		(8,987	)		(1,011	)		(9,998	)
Balance as of September 24, 2022	$	(8,874	)	$	(6,527	)	$	(15,401	)

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Investments (Tables)

9 Months Ended

Sep. 24, 2022

Amortized Cost and Fair Value of Available-for-Sale Investments

The amortized cost and fair values of available-for-sale investments are as follows at September 24, 2022 and December 25, 2021 (in thousands):    

			Gross		Gross
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 24, 2022
Money market investments	$	22,062	$	—	$	—	$	22,062
Asset-backed securities		19,742		—		2,666		17,076
Corporate bonds and direct obligations of government agencies		129,250		—		8,536		120,714
U.S. Treasury obligations		2,344		—		102		2,242
Total	$	173,398	$	—	$	11,304	$	162,094
December 25, 2021
Money market investments	$	8,750	$	—	$	—	$	8,750
Asset-backed securities		22,441		—		346		22,095
Corporate bonds and direct obligations of government agencies		137,916		1,406		966		138,356
U.S. Treasury obligations		2,342		50		—		2,392
Total	$	171,449	$	1,456	$	1,312	$	171,593

Schedule of Unrealized Loss on Available-for-Sale Investments

For those available-for-sale investments with unrealized losses at September 24, 2022 and December 25, 2021, the following table summarizes the duration of the unrealized loss (in thousands):

	Less than 12 months				12 months or longer						Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
September 24, 2022
Asset-backed securities	$	3,224	$	453	$	13,852	$	2,213	$	17,076	$	2,666
Corporate bonds and direct obligations of government agencies		68,854		2,732		51,860		5,804		120,714		8,536
U.S. Treasury obligations		2,242		102		—		—		2,242		102
Total	$	74,320	$	3,287	$	65,712	$	8,017	$	140,032	$	11,304
December 25, 2021
Asset-backed securities	$	22,095	$	346	$	—	$	—	$	22,095	$	346
Corporate bonds and direct obligations of government agencies		72,526		966		—		—		72,526		966
Total	$	94,621	$	1,312	$	—	$	—	$	94,621	$	1,312

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Leases (Tables)

9 Months Ended

Sep. 24, 2022

Lease, Cost [Table Text Block]

The components of lease cost for finance leases and operating leases for the thirty nine weeks ended September 24, 2022 were (in thousands):

Finance leases:
Amortization of right-of-use assets	$	16,455
Interest on lease liability		2,117
Total finance lease cost		18,572
Operating leases:
Lease cost		2,587
Variable lease cost		—
Sublease income		(3,711	)
Total net operating lease income		(1,124	)
Total net lease cost	$	17,448

Schedule Of Supplemental Balance Sheet Information Related To Leases [Table Text Block]

A summary of the lease classification on our consolidated balance sheet as of September 24, 2022 is as follows (in thousands):

Assets:

Operating lease right-of-use assets	Other assets	$	1,628
Finance lease assets	Operating property, less accumulated depreciation and amortization		146,903
Total lease assets		$	148,531

Finance And Operating Lease Maturity [Table Text Block]

Liabilities:

The following table reconciles the undiscounted cash flows for the finance and operating leases to the finance and operating lease liabilities recorded on the balance sheet at September 24, 2022 (in thousands):

	Finance Leases		Operating Leases
2022 Remainder	$	10,680	$	194
2023		37,822		705
2024		27,969		542
2025		21,771		285
2026		13,633		—
Thereafter		3,214		—
Total future minimum lease payments		115,089		1,726
Less amount representing interest (1.6% to 4.6%)		5,619		98
Present value of minimum lease payments	$	109,470	$	1,628
Current maturities of long-term debt		37,375
Long-term debt, excluding current maturities		72,095
Other current liabilities				715
Deferred income taxes and other noncurrent liabilities				913

Schedule Discount Rate And Lease Term Used In Calculating Lease Liabilities And Assets [Table Text Block]

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of September 24, 2022 were:

	Finance Leases			Operating Leases
Weighted average remaining lease term (years)		3.5			2.6
Weighted average discount rate		2.9	%		4.5	%

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Schedule Of Revenue By Major Customers By Reporting Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 1,816,132	$ 1,734,299	$ 5,761,795	$ 4,592,551
BCO Independent Contractors – Truck
Disaggregation of Revenue [Line Items]
Percentage of consolidated revenue	35.00%	40.00%	35.00%	41.00%
Brokerage Carriers - Truck
Disaggregation of Revenue [Line Items]
Percentage of consolidated revenue	53.00%	51.00%	53.00%	50.00%
Rail Intermodal
Disaggregation of Revenue [Line Items]
Percentage of consolidated revenue	2.00%	3.00%	2.00%	3.00%
Ocean and air cargo carriers
Disaggregation of Revenue [Line Items]
Percentage of consolidated revenue	9.00%	5.00%	8.00%	4.00%
BCO Independent Contractor Truck and Brokerage Carriers Truck | Van Equipment
Disaggregation of Revenue [Line Items]
Revenue	$ 914,154	$ 918,115	$ 3,022,297	$ 2,502,025
BCO Independent Contractor Truck and Brokerage Carriers Truck | Unsided/Platform Equipment
Disaggregation of Revenue [Line Items]
Revenue	453,924	422,979	1,336,956	1,112,358
BCO Independent Contractor Truck and Brokerage Carriers Truck | Less than Truckload
Disaggregation of Revenue [Line Items]
Revenue	35,343	30,819	105,994	85,551
BCO Independent Contractor Truck and Brokerage Carriers Truck | Other Truck Transportation
Disaggregation of Revenue [Line Items]
Revenue	$ 195,345	$ 208,817	$ 632,001	$ 518,472

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Share-based Payment Arrangements - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefit from stock-based awards	$ 2,910,000	$ 1,039,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized share-based compensation (benefit)/expense	7,035,000	16,223,000
Unrecognized compensation cost, other than options	$ 19,700,000
Unrecognized compensation cost expected to be recognized over period, years	3 years 7 months 6 days
Non Vested Restricted Stock and Deferred Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost, other than options	$ 4,375,000
Unrecognized compensation cost expected to be recognized over period, years	1 year 10 months 24 days
Terms of award	Company’s common stock on the date of grant. Shares of non-vested restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100% on the first or fifth anniversary of the date of the grant. For restricted stock awards granted under the 2022 DSCP, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of recipient separation
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of stock options exercised during periods	$ 429,000	$ 644,000
Maximum | Restricted Stock Units (RSUs) | Prior to 2015 grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage of target available for common share issuance	100.00%
2011 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance	3,245,251
2011 Equity Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized for issuance	6,000,000
2013 Directors Stock Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock previously reserved for issuance	56,502
Number of shares available for grant	0
2022 Directors Stock Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized for issuance	200,000
Common stock reserved for issuance	193,217
2022 Directors Stock Compensation Plan | Deferred Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock vesting percentage	100.00%

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Amounts Recognized in Financial Statements with Respect to Plans (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total cost of the Plans during the period	$ 3,599	$ 7,824	$ 9,409	$ 18,717
Amount of related income tax benefit recognized during the period	(949)	(1,919)	(5,219)	(5,636)
Net cost of the Plans during the period	$ 2,650	$ 5,905	$ 4,190	$ 13,081

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Schedule of Information on Restricted Stock Units (Detail) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 24, 2022 $ / shares shares
Number of Shares
Beginning Balance | shares	209,399
Granted | shares	49,825
Shares earned in excess of target | shares	91,497
Vested shares, including shares earned in excess of target | shares	(177,146)
Forfeited | shares	(21,989)
Ending Balance | shares	151,586
Weighted Average Grant Date Fair Value
Beginning Balance | $ / shares	$ 102.9
Granted | $ / shares	139.54
Shares earned in excess of target | $ / shares	92.58
Vested shares, including shares earned in excess of target | $ / shares	95.48
Forfeited | $ / shares	113.85
Ending Balance | $ / shares	$ 115.8

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Schedule of Information on Non - Vested Restricted Stock Units (Detail) - Non Vested Restricted Stock and Deferred Stock Units	9 Months Ended
	Sep. 24, 2022 $ / shares shares
Number of Shares and Deferred Stock Units
Beginning Balance | shares	56,436
Granted | shares	25,354
Vested | shares	(27,074)
Forfeited | shares	(6,921)
Ending Balance | shares	47,795
Weighted Average Grant Date Fair Value
Beginning Balance | $ / shares	$ 125.16
Granted | $ / shares	152.54
Vested | $ / shares	122.68
Forfeited | $ / shares	144.45
Ending Balance | $ / shares	$ 138.3

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Summary of Information Regarding Stock Options (Detail) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 24, 2022 USD ($) $ / shares shares
Number of Options
Beginning Balance, number of options | shares	8,570
Exercised, number of options | shares	(4,100)
Ending Balance, number of options | shares	4,470
Weighted Average Exercise Price per Share
Beginning Balance, Weighted Average Exercise Price per Share | $ / shares	$ 55.42
Exercised, Weighted Average Exercise Price per Share | $ / shares	54.36
Ending Balance, Weighted Average Exercise Price per Share | $ / shares	$ 56.4
Options Exercisable, Number of Options
Options exercisable at the ending, Number of Options | shares	4,470
Options Exercisable, Weighted Average Exercise Price per Share
Options exercisable at the ending, Weighted Average Exercise Price per Share | $ / shares	$ 56.4
Weighted Average Remaining Contractual Term (years)
Options outstanding at September 24, 2022	4 months 24 days
Options exercisable at September 24, 2022	4 months 24 days
Aggregate Intrinsic Value
Options outstanding at September 24, 2022 | $	$ 386
Options exercisable at September 24, 2022 | $	$ 386

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Income Taxes - Additional Information (Detail)	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Income Taxes [Line Items]
Corporate income tax rate	21.00%	21.00%
Estimated annual effective income tax rate	24.50%	24.40%
Effective income tax rate	23.90%	24.20%

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Earnings Per Share - Additional Information (Detail) - shares	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options excluded from calculation of diluted earnings per share, antidilutive	0	0

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Additional Cash Flow Information - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Supplemental Cash Flow Information [Abstract]
Income taxes paid	$ 125,690,000	$ 71,823,000
Interest paid	3,101,000	2,780,000
Capital Lease Obligations Incurred	$ 26,741,000	$ 23,080,000

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Segment Information - Additional Information (Detail) - Customer	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Segment Reporting Information [Line Items]
Number of customers accounting for 10 percent or more of total revenue	0	0
No single customer accounted for benchmark percentage to be considered major customer	10.00%	10.00%

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Information Regarding Reportable Business Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021	Dec. 25, 2021
Segment Reporting Information [Line Items]
External revenue	$ 1,816,132	$ 1,734,299	$ 5,761,795	$ 4,592,551
Internal revenue	12,883	9,533	65,753	53,028
Investment income	716	706	2,023	2,138
Operating income	133,498	131,412	446,749	356,928
Expenditures on long-lived assets	13,629	9,561	21,096	18,561
Goodwill	41,004	40,980	41,004	40,980	$ 40,768
Transportation Logistics
Segment Reporting Information [Line Items]
External revenue	1,796,401	1,716,004	5,702,959	4,539,561
Operating income	120,164	123,410	412,054	323,370
Expenditures on long-lived assets	13,629	9,561	21,096	18,561
Goodwill	41,004	40,980	41,004	40,980
Insurance
Segment Reporting Information [Line Items]
External revenue	19,731	18,295	58,836	52,990
Internal revenue	12,883	9,533	65,753	53,028
Investment income	716	706	2,023	2,138
Operating income	$ 13,334	$ 8,002	$ 34,695	$ 33,558

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Components of and Changes in Accumulated Other Comprehensive Income, Net of Related Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			$ 862,010
Other comprehensive loss	$ (3,080)	$ (1,087)	(9,998)	$ (940)
Ending Balance	873,173		873,173
Unrealized Holding Gains (Losses) on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			113
Other comprehensive loss			(8,987)
Ending Balance	(8,874)		(8,874)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			(5,516)
Other comprehensive loss			(1,011)
Ending Balance	(6,527)		(6,527)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			(5,403)
Other comprehensive loss			(9,998)
Ending Balance	$ (15,401)		$ (15,401)

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Investments - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 24, 2022	Dec. 25, 2021
Debt Securities, Available-for-sale [Line Items]
Investments maximum maturity period	5 years
Unrealized gain (loss), net of unrealized gains/losses, on the investments in the bond portfolio	$ (11,304,000)	$ 144,000

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Amortized Cost and Fair Value of Available-for-Sale Investments (Detail) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 173,398	$ 171,449
Gross Unrealized Gains	0	1,456
Gross Unrealized Losses	11,304	1,312
Fair Value	162,094	171,593
Money market investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	22,062	8,750
Fair Value	22,062	8,750
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	19,742	22,441
Gross Unrealized Losses	2,666	346
Fair Value	17,076	22,095
Corporate bonds and direct obligations of government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	129,250	137,916
Gross Unrealized Gains		1,406
Gross Unrealized Losses	8,536	966
Fair Value	120,714	138,356
U.S. Treasury obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,344	2,342
Gross Unrealized Gains		50
Gross Unrealized Losses	102
Fair Value	$ 2,242	$ 2,392

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Schedule of Unrealized Loss on Available-for-Sale Investments (Detail) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Debt Securities, Available-for-sale [Line Items]
Available-for-sale investments with unrealized losses, Less than 12 months, Fair Value	$ 74,320	$ 94,621
Available-for-sale investments with unrealized losses, Less than 12 months, Unrealized Loss	3,287	1,312
Available-for-sale investments with unrealized losses, 12 months or longer, Fair Value	65,712
Available-for-sale investments with unrealized losses, 12 months or longer, Unrealized Loss	8,017
Available-for-sale investments with unrealized losses, Fair Value, Total	140,032	94,621
Available-for-sale investments with unrealized losses, Unrealized Loss, Total	11,304	1,312
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Available-for-sale investments with unrealized losses, Less than 12 months, Fair Value	3,224	22,095
Available-for-sale investments with unrealized losses, Less than 12 months, Unrealized Loss	453	346
Available-for-sale investments with unrealized losses, 12 months or longer, Fair Value	13,852
Available-for-sale investments with unrealized losses, 12 months or longer, Unrealized Loss	2,213
Available-for-sale investments with unrealized losses, Fair Value, Total	17,076	22,095
Available-for-sale investments with unrealized losses, Unrealized Loss, Total	2,666	346
Corporate bonds and direct obligations of government agencies
Debt Securities, Available-for-sale [Line Items]
Available-for-sale investments with unrealized losses, Less than 12 months, Fair Value	68,854	72,526
Available-for-sale investments with unrealized losses, Less than 12 months, Unrealized Loss	2,732	966
Available-for-sale investments with unrealized losses, 12 months or longer, Fair Value	51,860
Available-for-sale investments with unrealized losses, 12 months or longer, Unrealized Loss	5,804
Available-for-sale investments with unrealized losses, Fair Value, Total	120,714	72,526
Available-for-sale investments with unrealized losses, Unrealized Loss, Total	8,536	$ 966
U.S. Treasury obligations
Debt Securities, Available-for-sale [Line Items]
Available-for-sale investments with unrealized losses, Less than 12 months, Fair Value	2,242
Available-for-sale investments with unrealized losses, Less than 12 months, Unrealized Loss	102
Available-for-sale investments with unrealized losses, Fair Value, Total	2,242
Available-for-sale investments with unrealized losses, Unrealized Loss, Total	$ 102

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Leases - Additional Information (Detail)	Sep. 24, 2022 USD ($)
Leases Disclosure [Line Items]
Finance Lease Option to Purchase Option Value	$ 1
Lessee, Finance Lease, Term of Contract	5 years

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Leases - Components of Lease Cost for Finance Leases and Operating Leases (Detail) $ in Thousands	9 Months Ended
	Sep. 24, 2022 USD ($)
Finance leases:
Amortization of right-of-use assets	$ 16,455
Interest on lease liability	2,117
Total finance lease cost	18,572
Operating leases:
Lease cost	2,587
Sublease income	(3,711)
Total net operating lease income	(1,124)
Total net lease cost	$ 17,448

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Leases - Classification on our Consolidated Balance Sheet (Detail) $ in Thousands	Sep. 24, 2022 USD ($)
Total lease assets	$ 148,531
Other Assets [Member]
Operating lease right-of-use assets	1,628
Property Plant and Equipment Net [Member]
Finance lease assets	$ 146,903

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Leases - Undiscounted Cash Flows for the Finance and Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Operating Leased Assets [Line Items]
2022 Remainder	$ 10,680
2023	37,822
2024	27,969
2025	21,771
2026	13,633
Thereafter	3,214
Total future minimum lease payments	115,089
Less amount representing interest (1.6% to 4.4%)	5,619
Present value of minimum lease payments	109,470
Current maturities of long-term debt	37,375	$ 36,561
Long-term debt, excluding current maturities	72,095
2022 Remainder	194
2023	705
2024	542
2025	285
2026	0
Total future minimum lease payments	1,726
Less amount representing interest (1.6% to 4.6%)	98
Present value of minimum lease payments	1,628
Other current liabilities [Member]
Operating Leased Assets [Line Items]
Operating lease, liability, current	715
Deferred income taxes and other noncurrent liabilities [Member]
Operating Leased Assets [Line Items]
Operating lease, liability, non-current	$ 913

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Leases - Undiscounted Cash Flows for the Finance and Operating Leases (Parenthetical) (Details)	Sep. 24, 2022
Maximum [Member]
Finance lease Interest rate percentage	4.60%
Minimum [Member]
Finance lease Interest rate percentage	1.60%

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Leases - Weighted Average Remaining Lease Term and the Weighted Average Discount Rate for Finance and Operating leases (Detail)	Sep. 24, 2022
Weighted average remaining lease term (years)	3 years 6 months
Weighted average discount rate	2.90%
Weighted average remaining lease term (years)	2 years 7 months 6 days
Weighted average discount rate	4.50%

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Debt - Additional Information (Detail) - USD ($)			9 Months Ended
	Jul. 01, 2022	Aug. 18, 2020	Sep. 24, 2022	Dec. 25, 2021
Revolving Credit Facility
Debt Instrument [Line Items]
Debt Outstanding Excluding Capital Lease Obligations			$ 0	$ 0
Credit facility, initiation date		Aug. 18, 2020
Credit facility, debt covenants compliance			The Company is currently in compliance with all of the debt covenants under the Credit Agreement.
Revolving Credit Facility | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 600,000,000
Additional overnight secured financing rate	0.10%
Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Credit facility event of default, minimum percentage that a person or group should acquire outstanding capital stock			35.00%
Revolving Credit Facility | Minimum | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, unused credit commitment fee	0.20%
Revolving Credit Facility | Minimum | Eurodollar [Member] | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Borrowings, basis spread on variable rate	1.25%
Revolving Credit Facility | Minimum | Base Rate [Member] | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Borrowings, basis spread on variable rate	0.25%
Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Maximum Leverage ratio beyond which amount of cash dividends and other distributions to stockholders is limited			250.00%
Revolving Credit Facility | Maximum | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, borrowing capacity	$ 300,000,000
Credit facility, unused credit commitment fee	0.30%
Revolving Credit Facility | Maximum | Eurodollar [Member] | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Borrowings, basis spread on variable rate	2.00%
Revolving Credit Facility | Maximum | Base Rate [Member] | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Borrowings, basis spread on variable rate	1.00%
Letter of Credit | Second Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, borrowing capacity	$ 45,000,000

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Commitments and Contingencies - Additional Information (Detail)	Sep. 24, 2022 USD ($)
Current Investments | Collateral Pledged [Member]
Commitments and Contingencies Disclosure [Line Items]
Investments providing collateral for letters of credit to guarantee insurance claims	$ 50,637,000
Non-Current Investments
Commitments and Contingencies Disclosure [Line Items]
Total non-current investments	111,457,000
Non-Current Investments | Collateral Pledged [Member]
Commitments and Contingencies Disclosure [Line Items]
Investments providing collateral for letters of credit to guarantee insurance claims	34,437,000
Revolving Credit Facility
Commitments and Contingencies Disclosure [Line Items]
Letters of credit outstanding	33,493,000
Guarantee Payment of Insurance Claims
Commitments and Contingencies Disclosure [Line Items]
Letters of credit outstanding	$ 76,567,000

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Equity investment - Additional Information (Detail)	Apr. 01, 2022 USD ($)
Cavnue, LLC [Member] | Landstar Investment Holdo LLC [Member]
Equity Securities without Readily Determinable Fair Value [Line Items]
Equity investment	$ 4,999,000