What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-05 compared with 2022-10-28 · 95 added, 169 removed, 278 unchanged (49% of the section changed)

4 unchanged sentences

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.

Operating results for the thirteen weeks ended April 1, 2023 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 30, 2023.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K.

3 unchanged sentences

(Dollars in thousands, except per share amounts)

September 24,

Current Assets

31 unchanged sentences

(Dollars in thousands, except per share amounts)

Thirty Nine Weeks Ended

Thirteen Weeks Ended

September 24,

September 25,

September 24,

September 25,

Investment income

8 unchanged sentences

Operating income

Interest and debt expense

Interest and debt (income) expense

Income before income taxes

7 unchanged sentences

(Dollars in thousands)

Thirty Nine Weeks Ended

Thirteen Weeks Ended

September 24,

September 25,

September 24,

September 25,

Other comprehensive (loss) income:

Unrealized holding losses on available-for-sale

investments, net of tax benefit of $ 2,461 , $ 347 , $ 436 and $ 104

Foreign currency translation (losses) gains

Other comprehensive loss

Other comprehensive income (loss):

Unrealized holding gains (losses) on available-for-sale

investments, net of tax expense (benefit) of $ 306 and ($ 1,421 )

Foreign currency translation gains

Other comprehensive income (loss)

Comprehensive income

4 unchanged sentences

(Dollars in thousands)

Thirty Nine Weeks Ended

September 24,

September 25,

Thirteen Weeks Ended

OPERATING ACTIVITIES

8 unchanged sentences

Decrease (increase) in trade and other accounts receivable

Increase in other assets

Increase in accounts payable

(Decrease) increase in other liabilities

Increase (decrease) in insurance claims

Decrease in other assets

(Decrease) increase in accounts payable

Increase in other liabilities

(Decrease) increase in insurance claims

NET CASH PROVIDED BY OPERATING ACTIVITIES

4 unchanged sentences

Proceeds from sales of operating property

Purchase of non-marketable

NET CASH USED BY INVESTING ACTIVITIES

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

FINANCING ACTIVITIES

(Decrease) increase in cash overdraft

Decrease in cash overdraft

Dividends paid

Payment for debt issue costs

Proceeds from exercises of stock options

Taxes paid in lieu of shares issued related to stock-based compensation plans

Borrowings on revolving credit facility

Purchases of common stock

Principal payments on finance lease obligations

Payment of deferred consideration

NET CASH USED BY FINANCING ACTIVITIES

Effect of exchange rate changes on cash and cash equivalents

Decrease in cash, cash equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash and cash equivalents at end of period

Cash, cash equivalents and restricted cash at end of period

See accompanying notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

Thirteen Weeks Ended April 1, 2023 and March 26, 2022

(Dollars in thousands)

1 unchanged sentence

Comprehensive

(Loss) Income

Balance December 31, 2022

1 unchanged sentence

Purchases of common stock

Issuance of stock related to stock-

based compensation plans

Stock-based compensation

Other comprehensive loss

Balance March 26, 2022

Dividends ($ 0.25 per share)

Purchases of common stock

Issuance of stock related to stock-

based compensation plans

Stock-based compensation

Other comprehensive loss

Balance June 25, 2022

Dividends ($ 0.30 per share)

Purchases of common stock

Issuance of stock related to stock-

based compensation plans

Issuance of stock related to stock-based

compensation plans

Stock-based compensation

Other comprehensive loss

Balance September 24, 2022

Other comprehensive income

Balance April 1, 2023

Treasury Stock at Cost

Comprehensive

(Loss) Income

Balance December 25, 2021

Dividends ($ 0.25 per share)

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive loss

Balance March 27, 2021

Dividends ($ 0.21 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance June 26, 2021

Dividends ($ 0.25 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Issuance of stock related to stock-based

compensation plans

Stock-based compensation

Other comprehensive loss

Balance September 25, 2021

Balance March 26, 2022

See accompanying notes to consolidated financial statements.

10 unchanged sentences

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

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 thirteen-week periods ended April 1, 2023 and March 26, 2022 (dollars in thousands):

Thirteen Weeks Ended

September 24,

September 25,

September 24,

September 25,

Truck – BCO Independent Contractors

10 unchanged sentences

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”).

As of April 1, 2023, 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,

September 25,

September 24,

September 25,

Total cost of the Plans during the period

1 unchanged sentence

Net cost of the Plans during the period

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.

Included in income tax benefits recognized in the thirteen-week periods ended April 1, 2023 and March 26, 2022 were excess tax benefits from stock-based awards of $ 2,296,000 and $ 2,869,000 , respectively.

As of April 1, 2023, there were 193,217 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 3,022,221 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

4 unchanged sentences

Vested shares, including shares earned in excess of target

Outstanding at September 24, 2022

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

Outstanding at April 1, 2023

Represents additional shares earned under each of the February 1, 2019 and January 31, 2020 RSU awards, as fiscal year 2022 financial results exceeded target performance level.

During the thirteen-week period ended April 1, 2023, the Company granted RSUs with a performance condition.

Outstanding RSUs at both December 31, 2022 and April 1, 2023 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2022 Annual Report on Form 10-K.

RSUs with a performance condition granted on February 3, 2023 may vest on January 31 of 2026, 2027 and 2028 based on growth in operating income and pre-tax

income per diluted share from continuing operations as compared to the results from the 2022 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.

The Company recognized approximately $ 958,000 and $ 1,301,000 of share-based compensation expense related to RSU awards in the thirteen-week periods ended April 1, 2023 and March 26, 2022, respectively.

As of April 1, 2023, there was a maximum of $ 30.3 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 4.0 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.

Restricted Stock and Deferred Stock Units

The following table summarizes information regarding the Company’s outstanding shares of non-vested

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

Weighted Average

at December 31, 2022

at September 24, 2022

at April 1, 2023

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.

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, third 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.

2 unchanged sentences

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

As of April 1, 2023, there was $ 5,578,000 of total unrecognized compensation cost related to non-vested

shares of restricted stock and Deferred Stock Units granted under the Plans.

2 unchanged sentences

Stock Options

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

Weighted Average

Exercise Price

Weighted Average

Aggregate Intrinsic

Options outstanding at December 25, 2021

Options outstanding at September 24, 2022

Options exercisable at September 24, 2022

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.

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

All 1,900 stock options outstanding and exercisable at December 31, 2022 were exercised at an exercise price of $ 56.40 as of January 31, 2023, following which the Company had no remaining issued and outstanding vested or unvested stock options.

The total intrinsic value of stock options exercised during the thirteen-week periods ended April 1, 2023 and March 26, 2022 was $ 218,000 and $ 369,000 , respectively.

As of April 1, 2023, there was no unrecognized compensation cost related to non-vested

stock options granted under the Plans.

The provisions for income taxes for the 2023 and 2022 thirteen-week periods were based on estimated annual effective income tax rates of 24.4 % and 24.5 %, 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 the 2023 period primarily attributable to state taxes and non-deductible meals and entertainment.

The estimated annual effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2022 period

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.

The effective income tax rate for the 2023 thirteen-week period was 23.3 %, 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.

The effective income tax rate for the 2022 thirteen-week period was 22.8 %, 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.

Earnings Per Share

2 unchanged sentences

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

During the 2023 and 2022 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.

For each of the thirteen-week periods ended April 1, 2023 and March 26, 2022, 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.

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.

During the 2023 thirteen-week period, Landstar paid income taxes and interest of $ 895,000 and $ 1,030,000 , respectively.

During the 2022 thirteen-week period, Landstar paid income taxes and interest of $ 2,031,000 and $ 1,029,000 , respectively.

Landstar did not acquire any operating property by entering into finance leases in either the 2023 or 2022 thirteen-week periods.

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

External revenue

Internal revenue

Investment income

Operating income

Expenditures on long-lived assets

The following table summarizes information about the Company’s reportable business segments as of and for the thirteen-week periods ended April 1, 2023 and March 26, 2022 (in thousands):

Thirteen Weeks Ended

September 24, 2022

September 25, 2021

April 1, 2023

March 26, 2022

Transportation

5 unchanged sentences

Expenditures on long-lived assets

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.

In the thirteen-week periods ended April 1, 2023 and March 26, 2022, no single customer accounted for more than 10 % of the Company’s consolidated revenue.

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):

Holding Gains

The following table presents the components of and changes in accumulated other comprehensive (loss) income, net of related income taxes, as of and for the thirteen-week period ended April 1, 2023 (in thousands):

Holding (Losses)

Available-for-Sale

Foreign Currency

Balance as of December 31, 2022

Other comprehensive loss

Balance as of September 24, 2022

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.

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.

Other comprehensive income

Balance as of April 1, 2023

Investments include primarily investment-grade corporate bonds, U.S.

treasury obligations

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

3 unchanged sentences

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.

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 non-credit-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.

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,

3 unchanged sentences

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.

Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $ 9,337,000 and $ 10,763,000 at April 1, 2023 and December 31, 2022, respectively.

The amortized cost and fair values of available-for-sale

investments are as follows at September 24, 2022 and December 25, 2021 (in thousands):

September 24, 2022

investments are as follows at April 1, 2023 and December 31, 2022 (in thousands):

April 1, 2023

Money market investments

8 unchanged sentences

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):

investments with unrealized losses at April 1, 2023 and December 31, 2022, the following table summarizes the duration of the unrealized loss (in thousands):

Less than 12 months

12 months or longer

September 24, 2022

April 1, 2023

Asset-backed securities

4 unchanged sentences

Corporate bonds and direct obligations of government agencies

Treasury obligations

The Company believes unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality.

1 unchanged sentence

For these reasons, no losses have been recognized in the Company’s consolidated statements of income.

Landstar’s noncancelable leases are primarily comprised of finance leases for the acquisition of new trailing equipment.

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.

7 unchanged sentences

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.

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.

2 unchanged sentences

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):

The components of lease cost for finance leases and operating leases for the thirteen weeks ended April 1, 2023 were (in thousands):

Finance leases:

7 unchanged sentences

Total net lease cost

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

Operating lease right-of-use

A summary of the lease classification on our consolidated balance sheet as of April 1, 2023 is as follows (in thousands):

Operating lease right-of-use assets

Finance lease assets

1 unchanged sentence

Total lease assets

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):

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 April 1, 2023 (in thousands):

2023 Remainder

6 unchanged sentences

Deferred income taxes and other noncurrent liabilities

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

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of April 1, 2023 were:

Finance Leases

2 unchanged sentences

Weighted average discount rate

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.

than the finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of April 1, 2023 and December 31, 2022.

, 2022, Landstar entered into a second amended and restated credit agreement

with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”).

The 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 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 .

As of April 1, 2023, the Company had no borrowings outstanding under 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.

10 unchanged sentences

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.

Short-term investments include $ 47,168,000 in current maturities of investments held by the Company’s insurance segment at April 1, 2023.

The non-current

2 unchanged sentences

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.

As of April 1, 2023, Landstar also had $ 33,492,000 of additional letters of credit outstanding under the Company’s Credit Agreement.

The Company is involved in certain claims and pending litigation arising from the normal conduct of business.

1 unchanged sentence

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.

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).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements