Filed 2026-02-24 · Period ending 2025-12-27 · 58,508 words · SEC EDGAR
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# LANDSTAR SYSTEM INC (LSTR) — 10-K **Filed:** 2026-02-24 **Period ending:** 2025-12-27 **Accession:** 0001193125-26-064756 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/853816/000119312526064756/) **Origin leaf:** efcc189f39f8c755323735a780b975ac75fb9aa4cb63a9ea11ea8cb8251d8d26 **Words:** 58,508 --- [Table of Contents](#toc) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | For the Fiscal Year Ended December 27, 2025 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 | | 32224 | | | (Address of principal executive offices) | | (Zip Code) | | (904) 398-9400 (Registrants telephone number, including area code) Securities registered pursuant to Section12(b) of the Act: | | | Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered | | | Common Stock | | LSTR | | NASDAQ | | Securities Registered Pursuant to Section12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section13 or Section15(d) of the Act.Yes No Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 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 | | | | Acceleratedfiler | | | | | | | Non-accelerated filer | | | | Smallerreportingcompany | | | | | | | | | Emerginggrowthcompany | | | | 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 Section13(a) of the Exchange Act. Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive ocers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).YesNo The aggregate market value of the voting stock held by non-affiliates of the registrant was $4,792,022,000 (based on the per share closing price on June28, 2025, the last business day of the Companys second fiscal quarter, as reported on the NASDAQ Global Select Market). In making this calculation, the registrant has assumed, without admitting for any purpose, that all directors and executive officers of the registrant, and no other persons, are affiliates. The number of shares of the registrants common stock, par value $0.01 per share (the Common Stock), outstanding as of the close of business on January23, 2026 was 34,058,726. DOCUMENTS INCORPORATED BY REFERENCE Portions of the following document are incorporated by reference in this Form 10-K as indicated herein: | | | Document | | Part of 10-K IntoWhichIncorporated | | | Proxy Statement relating to Landstar System, Inc.s Annual Meeting of Stockholders scheduled to be held on May5,2026 | | PartIII | | [Table of Contents](#toc) LANDSTAR SYSTEM, INC. 2025 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS | | | | | | | Page | | | | | PART I | | | | Item1. | | Business | | | 3 | | | | Item1A. | | Risk Factors | | | 14 | | | | Item1B. | | Unresolved Staff Comments | | | 23 | | | | Item1C. | | Cybersecurity | | | 23 | | | | Item 2. | | Properties | | | 24 | | | | Item 3. | | Legal Proceedings | | | 24 | | | | Item 4. | | Mine Safety Disclosures | | | 24 | | | | | | | PART II | | | | | | Item 5. | | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | 25 | | | | Item 6. | | Reserved | | | 27 | | | | Item 7. | | Managements Discussion and Analysis of Financial Condition and Results of Operations | | | 27 | | | | Item 7A. | | Quantitative and Qualitative Disclosures About Market Risk | | | 43 | | | | Item 8. | | Financial Statements and Supplementary Data | | | 44 | | | | Item 9. | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | | 72 | | | | Item 9A. | | Controls and Procedures | | | 72 | | | | Item 9B. | | Other Information | | | 75 | | | | Item 9C. | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | 75 | | | | Item 10. | | Directors, Executive Officers and Corporate Governance | | | 76 | | | | Item 11. | | Executive Compensation | | | 76 | | | | Item 12. | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | 76 | | | | Item 13. | | Certain Relationships and Related Transactions, and Director Independence | | | 76 | | | | Item 14. | | Principal Accounting Fees and Services | | | 77 | | | | | | | PART IV | | | | | | Item 15. | | Exhibits and Financial Statement Schedules | | | 78 | | | | Signatures. | | | 81 | | | | | | EX 31.1 Section302 CEO Certification | | | EX 31.2 Section302 CFO Certification | | | EX 32.1 Section906 CEO Certification | | | EX 32.2 Section906 CFO Certification | | 2 [Table of Contents](#toc) PART I Item1. Business Introduction Landstar System, Inc. was incorporated in January 1991 under the laws of the State of Delaware and has been a publicly held company since its initial public offering in March 1993. The principal executive offices of Landstar System, Inc. (collectively with its subsidiaries and other affiliated companies referred to herein as Landstar or the Company, unless the context otherwise requires) is located at 13410 Sutton Park Drive South, Jacksonville, Florida 32224 and its telephone number is (904) 398-9400. The Company makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and any amendments to those reports filed or furnished pursuant to Section13(a) and 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (SEC). The Companys website is www.landstar.com. The SEC maintains a website at http://www.sec.gov that contains the Companys current and periodic reports, proxy and information statements and other information filed electronically with the SEC. Description of Business Landstar, is a 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 customers 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 Companys services emphasize safety, cargo security, information coordination and customer service and are delivered through a network of approximately 960 independent commission sales agents and over 70,000 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 Companys 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. Landstars independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstars capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Companys 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 Landstars ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.7billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment. Transportation Logistics Segment The transportation logistics segment provides a wide range of integrated transportation management solutions. Transportation services are provided by Landstars 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 Landstar Blue, LLC. 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, hazardous materials (haz-mat), cold chain/temperature-controlled, 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, military equipment and general commodities. 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. See Notes to Consolidated Financial Statements for the amount of revenue from external customers and measure of profit attributable to the transportation logistics segment for the last three fiscal years. 3 [Table of Contents](#toc) Truck Transportation Services. The transportation logistics segments truck transportation services include a full array of truckload transportation for a wide range of commodities and, to a lesser degree, less-than-truckload and other truck transportation services. A significant portion of the Companys truckload services is priced in the spot market and delivered over irregular or non-repetitive routes, while approximately 24% of the Companys fiscal year 2025 truck transportation revenue was generated by BCO Independent Contractors utilizing Landstar provided trailing equipment, which frequently is used on more routine, regular routes. The Company utilizes a broad assortment of equipment, including dry and specialty vans of various sizes, unsided/platform trailers (including flatbeds, drop decks and specialty trailers) and temperature-controlled vans. Available truck transportation services also include short-to-long haul movement of containers by truck and expedited ground and dedicated power-only truck capacity. During fiscal year 2025, revenue generated by BCO Independent Contractors and Truck Brokerage Carriers was 38% and 53%, respectively, of consolidated revenue. Also, during fiscal year 2025, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 54% and 35%, respectively, of truck transportation revenue and less-than-truckload and other truck transportation revenue was 2% and 9%, respectively, of truck transportation revenue. The Companys truck transportation services contributed 91% of consolidated revenue in fiscal year 2025, 90% of consolidated revenue in fiscal year 2024 and 91% of consolidated revenue in fiscal year 2023. As previously disclosed by the Company in a Current Report on Form 8-K filed with the SEC on August13, 2025, the Company entered into an arrangement with a financial advisor to actively market its Mexican subsidiary, Landstar Metro, S.A.P.I. de C.V. (Landstar Metro) and to consider other strategic alternatives for this subsidiary, which may involve a sale or other disposition in whole or in part of Landstar Metro during the Companys 2026 fiscal year. It is not anticipated that a sale or other disposition of Landstar Metro will adversely affect the Companys ability to provide U.S.-Mexico cross-border services, given that Landstar Metro is principally engaged in intra-Mexico truck transportation services. In connection with the decision to actively market Landstar Metro, the Company recorded a non-cash impairment charge of $7,530,000 to goodwill within the transportation logistics segment. Further, based on the expected fair value ofLandstar Metro, net of costs to sell, the Company recognized an impairment on assets held for sale of $10,678,000. Both impairments are included in impairment of intangible and other assets within the Companys consolidated statements of income. Rail Intermodal Services. The transportation logistics segments rail intermodal services operate with contracts with Class1 domestic and Canadian railroads, certain short-line railroads and most major asset-based intermodal equipment providers, including agreements with stacktrain operators and container and trailing equipment companies. In addition, the transportation logistics segments rail intermodal services operate with contracts with a vast network of local trucking companies that handle pick-up and delivery of rail freight. These contracts provide the transportation logistics segment the ability to transport freight via rail throughout the United States, Canada and Mexico. The transportation logistics segments rail intermodal service capabilities include trailer on flat car, container on flat car, box car and railcar. The transportation logistics segments rail intermodal services contributed 2% of consolidated revenue in each of fiscal years 2025, 2024 and 2023. Air and Ocean Services. The transportation logistics segment provides domestic and international air services and ocean services to its customers. The Company executes international air freight transportation as an International Air Transport Association (IATA) certified Indirect Air Carrier (IAC) and international ocean freight transportation as an Ocean Transportation Intermediary (OTI) licensed by the Federal Maritime Commission (FMC) as a non-vessel operating common carrier (NVOCC) and ocean freight forwarder. Through its network of independent commission sales agents, relationships within a global network of foreign transportation intermediaries and contracts with a number of airlines and ocean lines, the transportation logistics segment provides efficient and cost effective door-to-door transportation to most points in the world for a vast array of cargo types such as over-sized break bulk, consolidations, full container loads, less-than container loads and refrigerated freight. The transportation logistics segments air and ocean services contributed 5% of consolidated revenue in fiscal year 2025, 6% of consolidated revenue in fiscal year 2024 and 5% of consolidated revenue in fiscal year 2023. Insurance Segment The insurance segment is comprised of Signature Insurance Company (Signature), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. (RMCS). The insurance segment provides risk and claims management services to certain of Landstars Operating Subsidiaries. In addition, it reinsures certain risks of the Companys BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstars Operating Subsidiaries. 4 [Table of Contents](#toc) 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 of loss is ultimately borne by Signature. Revenue at the insurance segment represented approximately 1% of the Companys consolidated revenue in each of fiscal years 2025, 2024 and 2023. See Notes to Consolidated Financial Statements for the amount of revenue from external customers and measure of profit attributable to the insurance segment for the last three fiscal years. Factors Significant to the Companys Operations Management believes the following factors are particularly significant to the Companys operations: Agent Network The Companys primary day-to-day contact with its customers is through its network of independent commission sales agents and, to a lesser extent, through employees of the Company. The typical Landstar independent commission sales agent maintains a relationship with a number of shippers and services these shippers utilizing the Companys digital technologies and extensive network of third party capacity that provides various modes of transportation services to the Company. The Company provides assistance to the agents in developing additional relationships with shippers and enhancing agent and Company relationships with larger shippers through the Companys field employees, located throughout the United States and Canada. The Operating Subsidiaries provide programs to support the agents operations and tools and data to assist agents in establishing pricing for freight hauled by the various modes of transportation available to the agents. It is important to note that the Operating Subsidiaries, and not the Companys agents, contract directly with customers and generally assume the related credit risk and potential liability for freight losses or damages when the Company is providing transportation services as a motor carrier. Management believes the Company has more independent commission sales agents than any other asset-light integrated transportation management solutions company in the United States. Landstars vast network of independent commission sales agent locations provides the Company regular contact with shippers at the local level and the capability to be highly responsive to shippers changing needs. The Companys large network of available capacity provides independent commission sales agents with the resources needed to service both large and small shippers. Through its agent network, the Company offers smaller shippers a level of service comparable to that typically enjoyed only by larger customers. Examples include the ability to provide transportation services on short notice, multiple pick-up and delivery points, automated information flow, access to specialized equipment, spotted van trailers and drop-and-hook operations. While the majority of the agents in the Companys network arrange truck transportation services for shippers, a number of the Companys agents specialize in certain types of freight and transportation services (such as oversized or heavy loads and/or rail, air and international freight transportation). Each independent commission sales agent has the opportunity to market all of the services provided by the transportation logistics segment. The independent commission sales agents use a variety of digital technologies provided by the Company to service the requirements of shippers. For truckload services, the Companys independent commission sales agents primarily use a Landstar cloud-based platform to enter available freight, dispatch capacity and process most administrative tasks and then communicate that information to Landstar and its capacity providers. The Companys cloud-based available truck platform provides a listing of available truck capacity to the Companys independent commission sales agents. The Company also offers independent commission sales agents a variety of proprietary pricing, operational and financial tools via web or mobile applications. For modes of transportation other than truckload, the independent commission sales agents utilize both proprietary and third party information technology applications provided by the Company. 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. The Company had 457 and 485 agents that each generated at least $1million in Landstar revenue (the Million Dollar Agents) during fiscal years 2025 and 2024, respectively. Landstar revenue from the Million Dollar Agents in the aggregate represented 95% and 94% of consolidated revenue in 2025 and 2024, respectively. Included among the Companys Million Dollar Agents, the Company had 77 independent sales agencies that generated at least $10million in Landstar revenue during the 2025 5 [Table of Contents](#toc) fiscal year, which in aggregate comprised approximately 68% of Landstars consolidated revenue. Management believes that the majority of the Million Dollar Agents represent the Company exclusively. Historically, the Company has experienced very few terminations of its Million Dollar Agents, whether such terminations are initiated by the agent or the Company. Annual terminations of Million Dollar Agents have typically been less than 3% of the total number of Million Dollar Agents. Third Party Capacity The Company relies exclusively on independent third parties for its hauling capacity other than for trailing equipment owned or leased by the Company and utilized primarily by the BCO Independent Contractors. These third party transportation capacity providers consist of BCO Independent Contractors, Truck Brokerage Carriers, air and ocean cargo carriers and railroads. Landstars use of capacity provided by third parties allows it to maintain a lower level of capital investment, resulting in lower fixed costs and a higher return on invested capital. During fiscal year 2025, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 53% and 2%, respectively, of the Companys consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Companys consolidated revenue during fiscal year 2025. Historically, variable contribution margin (defined as variable contribution, which is defined as revenue less variable costs of revenue, divided by revenue) generated from freight hauled by BCO Independent Contractors has been greater than that from freight hauled by other third party capacity providers. However, the Companys insurance and claims costs, depreciation costs and other operating costs are incurred primarily in support of BCO Independent Contractor capacity. In addition, as further described in the Corporate Services section that follows, the Company incurs significantly higher selling, general and administrative costs in support of BCO Independent Contractor capacity as compared to the other modes of transportation. Purchased transportation costs are recognized over the freight transit period as the performance obligation to the customer is completed. BCO Independent Contractors. Management believes the Company has the largest fleet of truckload BCO Independent Contractors in the United States. BCO Independent Contractors provide truck capacity to the Company under exclusive lease arrangements. Each BCO Independent Contractor operates under the motor carrier operating authority issued by the U.S. Department of Transportation (DOT) to Landstars Operating Subsidiary to which such BCO Independent Contractor provides services and has leased his or her equipment. The Companys network of BCO Independent Contractors provides marketing, operating, customer service, safety, freight security, recruiting and retention advantages to the Company. The Companys BCO Independent Contractors are compensated primarily based on a contractually agreed-upon percentage of revenue generated by loads they haul. This percentage generally ranges from 62% to 70% where the BCO Independent Contractor provides only a tractor and 73% to 77% where the BCO Independent Contractor provides both a tractor and trailing equipment. The BCO Independent Contractor must pay substantially all of the expenses of operating his/her equipment, including driver wages and benefits, fuel, physical damage insurance, maintenance, highway use taxes and debt service, if applicable. The Company passes 100% of fuel surcharges billed to customers for freight hauled by BCO Independent Contractors to its BCO Independent Contractors. During fiscal year 2025, the Company billed customers $229million in fuel surcharges and passed 100% of such fuel surcharges to the BCO Independent Contractors. These fuel surcharges are excluded from revenue and the cost of purchased transportation. The Company maintains an ecosystem of digital technologies and applications through which BCO Independent Contractors can view a comprehensive listing of the Companys available freight, allowing them to consider rate, size, origin and destination when planning trips. The Companys LandstarOne mobile application provides BCO Independent Contractors information on loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations. The Landstar Contractors Advantage Purchasing Program (LCAPP) leverages Landstars purchasing power to provide discounts to eligible BCO Independent Contractors when they purchase equipment, fuel, tires and other items. In addition, Landstar Contractor Financing, Inc. provides a source of funds at competitive interest rates to the BCO Independent Contractors to purchase trailing equipment. The number of trucks provided to the Company by BCO Independent Contractors was 8,514 at December27, 2025, compared to 8,843 at December28, 2024. At December27, 2025, approximately 96% of the trucks provided by BCO Independent Contractors were provided by BCO Independent Contractors who provided five or fewer trucks to the Company. The number of trucks provided by BCO Independent Contractors fluctuates daily as a result of truck recruiting and truck terminations. The Company recruited more trucks in fiscal year 2025 than in fiscal year 2024 and terminated less trucks in fiscal year 2025 than in fiscal year 2024. However, the number of trucks recruited was less than the number of trucks terminated, resulting in an overall net 6 [Table of Contents](#toc) decrease of 329 trucks during fiscal year 2025. Landstars BCO Independent Contractor truck turnover was approximately 31% in fiscal year 2025, compared to 35% in fiscal year 2024. Approximately 33% of 2025 turnover was attributable to BCO Independent Contractors who had been with the Company for less than one year. Management believes the factors that have historically favorably impacted turnover include the Companys extensive agent network, the quantity and quality of available freight, the proprietary technology-based tools the Company makes available to BCO Independent Contractors to empower them to manage their businesses, the Companys programs to reduce the operating costs of its BCO Independent Contractors and Landstars reputation for quality, safety, cargo security, service, reliability and financial strength. Sequential strengthening or weakening of revenue per load historically has also had a significant impact on BCO Independent Contractor turnover. Truck Brokerage Carriers. At December27, 2025, the Company maintained a database of over 62,000 approved Truck Brokerage Carriers who provide truck capacity to the Company. Truck Brokerage Carriers provide truck capacity to the Company under non-exclusive contractual arrangements and each operates under its own DOT-issued motor carrier operating authority. Truck Brokerage Carriers are paid either a negotiated rate for each load hauled or, to a lesser extent, a contractually agreed-upon fixed rate per load. The Company recruits, approves, establishes contracts with and tracks safety ratings and service records of these third party trucking companies. In addition to providing additional capacity to the Company, the use of Truck Brokerage Carriers enables the Company to pursue different types and quality of freight such as short-haul traffic, less-than-truckload and, in certain instances, lower-priced freight that generally would not be desirable to the Companys BCO Independent Contractors. The Company maintains an ecosystem of digital technologies and applications through which Truck Brokerage Carriers can view a listing of the Companys freight that is available to them. The Landstar Savings Plus Program leverages Landstars purchasing power to provide discounts to eligible Truck Brokerage Carriers when they purchase fuel and equipment and provides the Truck Brokerage Carriers with an electronic payment option. Railroads and Air and Ocean Cargo Carriers. The Company has contracts with Class1 domestic and Canadian railroads, certain short-line railroads and domestic and international airlines and ocean lines. These relationships allow the Company to pursue the freight best serviced by these forms of transportation capacity. Railroads and ocean cargo carriers are paid either a negotiated rate for each load hauled or a contractually agreed-upon fixed rate per load. Air cargo carriers are generally paid a negotiated rate for each load hauled. The Company also contracts with other third party capacity providers, such as air charter service providers, when required by specific customer needs. Trailing Equipment The Company offers its customers a large and diverse fleet of trailing equipment. The following table illustrates the mix of the trailing equipment as of December27, 2025, either provided by the BCO Independent Contractors or owned or leased by the Company and made available primarily to BCO Independent Contractors. The Company also provides power-only services, as reported in other truck transportation revenue, utilizing trailing equipment generally provided by the shipper or other third party. In general, Truck Brokerage Carriers utilize their own trailing equipment when providing transportation services on behalf of Landstar. Power-only and Truck Brokerage Carrier trailing equipment is not included in the following table: | | | Trailers by Type | | | | | | Van | | | 14,523 | | | | Unsided/platform, including flatbeds, step decks, drop decks and low boys | | | 2,751 | | | | Temperature-controlled | | | 152 | | | | | | | | | | Total | | | 17,426 | | | | | | | | | Specialized services offered by the Company include those provided by a large fleet of platform trailers and multi-axle trailers capable of hauling extremely heavy or oversized loads. Management believes the Company, along with its network of capacity providers, offers one of the largest fleets of for-hire heavy/specialized trailing equipment in North America. At December27, 2025, 13,784 of the trailers available to the BCO Independent Contractors were owned by the Company and 601 were rented. In addition, at December27, 2025, 3,041 trailers were provided by the BCO Independent Contractors. Approximately 24% of Landstars truck transportation revenue was generated on Landstar-provided trailing equipment during fiscal year 2025. 7 [Table of Contents](#toc) Customers The Companys customer base is highly diversified and dispersed across many industries, commodities and geographic regions. The Companys top 100 customers accounted for approximately 46% of consolidated revenue during both fiscal years 2025 and 2024. Management believes that the Companys overall size, ecosystem of digital technologies and applications, geographic coverage, access to equipment and diverse service capability offer the Company significant competitive marketing and operating advantages. These advantages allow the Company to meet the needs of even the largest shippers. Larger shippers often consider reducing the number of authorized carriers they use in favor of a small number of core carriers, such as the Company, whose size and diverse service capabilities enable these core carriers to satisfy most of the shippers transportation needs. The Companys national account customers include the United States Department of Defense and many of the companies included in the Fortune 500. Large shippers also use third party logistics providers (3PLs) to outsource the management and coordination of their transportation needs. 3PLs and other transportation companies also utilize the Companys available transportation capacity to satisfy their obligations to their shippers. There were eight transportation service providers, including 3PLs, included in the Companys top 25 customers for fiscal year 2025. Management believes the Companys network of agents and third party capacity providers allows it to efficiently attract and service smaller shippers which may not be as desirable to other large transportation providers (see above under Agent Network). No customer accounted for more than 8% of the Companys 2025 revenue. Technology and Artificial Intelligence (AI) Landstar provides integrated transportation management solutions which emphasize customer service and information coordination among its independent commission sales agents, customers, capacity providers and employees. The Company is focused on identifying, purchasing or developing and implementing software applications and tools which integrate AI and are designed to: (i)assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of their independent businesses, (ii)assist customers in meeting their transportation needs with an emphasis on safety, security and service, (iii)assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses, and (iv)improve operational and administrative efficiency throughout the Company. Since 2016, Landstar has been executing a digital transformation strategy to ensure our network of agents, BCOs and other third party capacity providers remains highly competitive in an increasingly technology-driven freight environment. Our goal is enablementdelivering tools that help to automate the agent office, simplify the experience of operating as a Landstar business capacity owner or third-party carrier, and scale the efficiency and effectiveness of our entrepreneurs. Those earlier efforts, branded as Landstar 2020, serve as the foundation of a long-term commitment to building and deploying industry-leading technology across our entire ecosystem. Landstar 2020 included the rollout of the following tools to participants within our network: | | | | Landstar TMS: A cloud-based platform for truckload freight agent workflow. | | | | | | Analytics: A suite of business intelligence applications powered by Microsoft Power BI for independent sales agents and BCO Independent Contractors to access information and identify trends in their businesses. | | | | | | Pricing Tools: Landstar-proprietary pricing application developed with data scientists using historical Company information and third party pricing data to provide independent commission sales agents with near real time market data. | | | | | | BCO Retention Tool: Landstar-proprietary application developed with data scientists using a variety of data inputs to help predict when the contractual relationship between a BCO Independent Contractor and Landstar may be at risk. | | | | | | LandstarOne: Mobile application available to BCO Independent Contractors and third party motor carriers providing a one-stop location for available loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations. | | | | | | Clarity: Landstars proprietary freight tracking tool that incorporates geo-locational data from, among other sources, electronic logging devices, trailer tracking devices and third party data aggregators. | | | | | | Agent and Capacity Portals: New and improved cloud-based portals built to provide a single on-ramp to a multitude of applications, tools and information available to Landstar independent agents and capacity providers. | | | | | | Trailer Tools: Applications empowering independent commission sales agents through the automation of the Companys trailer request and trailer pool management processes. | | | | | | Credit: Application that automates the process for independent commission sales agents to request customer credit. | | 8 [Table of Contents](#toc) As we moved beyond Landstar 2020, we invested further in digital capabilities within our corporate operations and the support we provide to our entrepreneurial network, including the rollout of modern contact-center technology and significant upgrades to our financial, settlements, and back-office systems. These investments strengthen the overall connectivity and support provided to the Companys entrepreneurial network. The Companys approach to technology is built through close collaboration with its independent commission sales agents and BCO Independent Contractors, with a focus on enabling growth. By aligning technology investments with the needs of our network of entrepreneurs, Landstar aims to deliver tools that are designed to drive growth and deliver wins in the highly competitive transportation sector. In our independent commission sales agency model, growth may be constrained by the financial and technological resources of the agent, particularly for smaller agents. Agents may also view potential growth opportunities available to their small business as requiring an additional assumption of personal risk, due to many of the typical types of challenges faced by a small business seeking to scale-up in size: increased headcounts needs, greater financial investment, and increased management and operational complexity. Our objective has been to deploy technology to empower Landstar agents to grow, by offering tools that can automate workflows and improve efficiency within the agents business, while also helping to de-risk some of the types of challenges often faced by Landstar agents who are looking to grow. Our objective with respect to technology investments geared to empower Landstar BCO Independent Contractors is to eliminate manual and administrative friction relating to how BCO Independent Contractors engage with Landstar and operate their businesses in order to enable BCOs to be more productive, haul more freight, and better serve Landstar agents and customers. The end result is a differentiated value proposition for customers: a combination of advanced, purpose-built technology and highly motivated freight transportation and logistics professionals with a direct economic stake in delivering freight safely, securely, and with exceptional service. Landstar believes that AI represents the next major acceleration of this strategy and will provide opportunities to strengthen the safety, security and service value proposition the Company offers to its customers. Management believes AI can be a strategic enhancement to the competitive advantage of the Landstar business model and a powerful enabler of our entrepreneurial ecosystem. Importantly, Landstars AI strategy is evolutionarythe Company is building on the strong digital foundation already in place. Currently, machine learning is embedded within the following: | | | | Pricing Tools and BCO Retention Tool, allowing both products to improve as we scale the available data. | | | | | | Landstars new contact-center platform, which leverages AI to enhance the knowledge base of Landstar employee service representatives, analyze sentiment, automate routine tasks, summarize interactions, and free our teams to focus on higher-value problem solving. | | | | | | Landstar agent portal, improving access to information, providing actionable business insights, and enabling better and faster decision making. | | | | | | A new supply chain fraud detection solution that analyzes behavioral patterns, documentation, invoice images, and shipment characteristics to identify high-risk freight and reduce shipment losses. | | Landstar has also established an AI task force that is working with transportation-focused agentic AI startups and established technology companies to accelerate AI applications across the shipment lifecycle and within agent offices. These efforts are focused on driving efficiency, increasing productivity, improving decision-making, and further unlocking growth across the network. Since the launch of Landstar 2020 in 2016, the Company has invested approximately $220million in these strategic development efforts, including approximately $28million and $34million, respectively, in fiscal years 2025 and 2024. The Companys information technology systems used in connection with its operations are located in Jacksonville, Florida and, to a lesser extent, in Rockford, Illinois. In addition, the Company utilizes several third party data centers throughout the U.S. Landstar relies, in the regular course of its business, on the proper operation of its information technology systems. 9 [Table of Contents](#toc) Corporate Services The Company provides many administrative support services to its network of independent commission sales agents, third party capacity providers and customers. Management believes that the mobile and digital applications purchased or developed and maintained by the Company and its administrative support services provide operational and financial advantages to its independent commission sales agents, third party capacity providers and customers. These, in turn, enhance the operational and financial efficiency of all aspects of the network. Administrative support services that provide operational and financial advantages to the network include customer contract administration, customer credit review and approvals, pricing, customer billing, accounts receivable collections, third party capacity settlement, operator and equipment safety and compliance management for our network of BCO Independent Contractors, insurance claims handling, coordination of vendor discount programs and third party capacity sourcing programs. Marketing and advertising strategies are also provided by the Company. The Companys practices of accepting customer credit risk and paying its agents and carriers promptly provides a significant competitive advantage to the Company in comparison to less capitalized competitors. Competition Landstar competes primarily in the transportation and logistics services industry with truckload carriers, third party logistics companies, digital freight brokers, intermodal transportation and logistics service providers, railroads, less-than-truckload carriers and other asset-light transportation and logistics service providers. The transportation and logistics services industry is extremely competitive and fragmented. Management believes that competition for freight transported by the Company is based on service, efficiency, safety, freight security and freight rates, which are influenced significantly by the economic environment, particularly the amount of available transportation capacity and freight demand. Management believes that Landstars overall size, service offerings and availability of a wide range of equipment, together with its geographically dispersed local independent agent network, present the Company with significant competitive advantages over many transportation and logistics service providers. Self-Insured Claims Potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. Landstar retains liability through a self-insured retention for commercial trucking claims up to $5million per occurrence. Historically, these third party insurance arrangements were based on policy year periods beginning on May1 and ending on the subsequent April 30. Beginning with the policy year period commencing May1, 2025, the Company and its third party insurance providers adjusted the applicable policy year period, beginning in 2026, to commence on June1 and end on the subsequent May 31. All applicable third party insurance arrangements with a policy period ending April30, 2026 have been amended to provide for a policy period ending May31, 2026, as reflected below. Effective May1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5million and $10million (the 2023 Initial Excess Policy) with a third party insurance company. For commercial trucking claims incurred on or after May1, 2023 through May31, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18million over the thirty-seven-month term ending May31, 2026. After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5million, with an aggregate limit of $15million for the thirty-seven-month term ending May31, 2026. The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10million. These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past fifteen years, there has been a significant increase in the prevalence 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 $10million. 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. Since the annual policy year ended April30, 2020, as compared to the annual policy year ending May31, 2026, the Company experienced an increase of approximately $22million, or approximately 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10million. 10 [Table of Contents](#toc) In addition to the significant increase in the cost to motor carriers relating to commercial auto liability claims throughout the United States, there has also been a very significant increase throughout the United States in the number of, and potential loss exposure associated with, claims asserted against freight brokers in connection with accidents involving motor carriers the freight broker has engaged and contracted with to haul a shipment. The claims asserted against freight brokers often involve claims of negligent selection of the motor carrier who was involved in the relevant accident. Within the transportation logistics industry, these matters are often referred to as Broker Liability Claims. For example, see the discussion of the Cabral Matter (as defined below) in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. There is currently significant legal uncertainty regarding Broker Liability Claims as state and federal courts across the United States are divided as to whether such claims are preempted by federal law under the Federal Aviation Administration Authorization Act of 1994 (the FAAAA), or are subject to the safety exception under the FAAAA. The matter of Montgomery v. Caribe Transport II, LLC, in which the Company is not a party, is currently pending before the U.S. Supreme Court and may result in a ruling relating to federal preemption of Broker Liability Claims under the FAAAA. No assurances can be provided as to any such ruling by the U.S. Supreme Court, the timing thereof, or the impact any such ruling may have on pending or future Broker Liability Claims asserted against the Company, including the Cabral Matter. Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured 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 single hypothetical claim in the amount of $65million incurred during the annual policy year ending May31, 2026, the Company would have an aggregate financial exposure of approximately $36million. Within the Companys third party insurance arrangements providing excess coverage for commercial trucking liabilities, structured arrangements with third party reinsurers within a specific loss layer may include provisions that require additional payments of premium in the event of unfavorable loss experience or a refund of premium in the event of favorable loss experience. During the 2025 fiscal year, with respect to one such three-year commercial auto liability reinsurance arrangement relating to certain excess claims incurred between May1, 2020 through April30, 2023, the Company received $12,000,000 of cash payments from third party reinsurance providers in the form of a no claims bonus due to favorable loss experience with respect to claims incurred during the applicable policy period. As further described in Note 11 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K, in connection with the Judgment (as defined below) in the Cabral Matter, the Company has recorded the no claims bonus within current insurance claims in the consolidated balance sheet as of December27, 2025. The Company intends to vigorously appeal the Cabral Matter, including the Judgment; however, no assurances can be provided regarding whether the Company will ultimately be able to recognize a gain with respect to the no claims bonus. For more information about the Cabral Matter, see Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. Furthermore, the Companys 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 Landstars cost of insurance and claims and its results of operations. Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers compensation claim and $250,000 for each cargo claim. In recent years, the amount of cargo theft throughout the freight transportation and logistics supply chain in the United States has significantly increased. The Company has experienced, and may continue to experience, increases in the amount of cargo theft, resulting in increased exposure to liability from cargo claims. In addition, under reinsurance arrangements by Signature of certain risks of the Companys 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 Companys 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 legal defenses and other 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, including further increases in the amount of cargo theft, or workers compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstars cost of insurance and claims and its results of operations. 11 [Table of Contents](#toc) Regulation Certain of the Operating Subsidiaries are considered motor carriers and/or brokers authorized to arrange for transportation services by motor carriers which are regulated by the Federal Motor Carrier Safety Administration (the FMCSA) and by various state agencies. The FMCSA has broad regulatory powers with respect to activities such as motor carrier operations, practices, periodic financial reporting and insurance. Subject to federal and state regulatory authorities or regulation, the Companys capacity providers may transport most types of freight to and from any point in the United States over any route they select. Interstate motor carrier operations are subject to safety requirements prescribed by the FMCSA. Each truck operator, whether working as a BCO Independent Contractor or for a Truck Brokerage Carrier, is required to have a commercial drivers license (CDL) and may be subject to mandatory drug and alcohol testing. Effective May20, 2025, the FMCSA established a new enforcement policy with respect to English language proficiency (ELP) requirements applicable to commercial motor vehicle drivers and the ability of such drivers to communicate effectively with law enforcement and understand highway traffic signs throughout the United States. In 2025, the FMCSA also proposed amendments to federal regulations applicable to the issuance by State Drivers Licensing Agencies (SDLAs) of CDLs to foreign-domiciled individuals in order to significantly limit the authority of SDLAs to issue and renew CDLs with respect to individuals domiciled in a foreign jurisdiction and/or who do not maintain a lawful immigration status in the United States.The FMCSAs CDL licensing requirements, drug and alcohol testing requirements, ELP policy and non-domiciled CDL initiative have not adversely affected the Companys ability to source the capacity necessary to meet its customers transportation needs. Additionally, certain of the Operating Subsidiaries are licensed as Ocean Transportation Intermediaries by the U.S. Federal Maritime Commission as non-vessel-operating common carriers and/or as ocean freight forwarders. The Companys air transportation activities in the United States are subject to regulation by the U.S. Department of Transportation as an indirect air carrier. One of the Operating Subsidiaries is licensed by the U.S. Department of Homeland Security through the Bureau of U.S. Customs and Border Protection (U.S. Customs) as a customs broker. The Company is also subject to regulations and requirements relating to safety and security promulgated by, among others, the U.S. Department of Homeland Security through U.S. Customs and the Transportation Security Administration, the Canada Border Services Agency and various state and local agencies and port authorities. In addition, because the U.S. government is one of the Companys customers, the Company must comply with and is affected by laws and regulations relating to doing business with the federal government. The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators. For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, Risk Factors. Seasonality Landstars operations are subject to seasonal trends common to the trucking industry. Historically, truckload shipments for the quarter ending in March are typically lower than for the quarters ending in June, September and December. 12 [Table of Contents](#toc) Human Capital Resources We believe our employees are among our most important resources and are critical to our continued success. Landstar has established Core Values to help guide employee behavior, decision-making and culture within our Company, and to foster alignment and engagement among our employees. Landstars Core Values are: We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations. To attract and retain top talent in our highly competitive industry, we have designed our compensation and benefits programs to provide a balanced and effective reward structure. Landstar seeks to compensate employees in a manner that is fair, consistent, and reflective of the external market and provides recognition for the achievement of individual strategic, operational, administrative and other goals, corporate objectives, and professional competencies while maintaining fiscal responsibility. Our short and long-term incentive programs are aligned with key business objectives and strategic goals and are intended to motivate strong performance. Our employees are eligible to participate in our medical, dental and vision programs, a 401(k) savings/retirement plan, flexible time-off, employer-provided life and disability insurance, our wellness program, our tuition reimbursement program, and an array of voluntary benefits designed to meet individual needs. We engage firms nationally recognized in the benefits area to objectively evaluate our programs and benchmark them against peers and other similarly situated organizations. As of December27, 2025, the Company and its subsidiaries employed 1,378 individuals, or 1,294 individuals excluding employees at Landstar Metro which is classified as held for sale. Two Landstar Ranger drivers (out of a Company total of approximately 8,514 drivers for BCO Independent Contractors) are members of the International Brotherhood of Teamsters. The turnover rate for Landstar employees located in the United States and Canada was 11% in 2025, 12% in 2024 and 14% in 2023. The Company considers relations with its employees to be good. The Company has identified the following employee-focused goals: | | | | Create and maintain an environment in which continuous improvement, collaboration and accountability are encouraged and expected by everyone within the organization; | | | | | | Engage each Landstar employee in the Companys vision to inspire and empower entrepreneurs to succeed in the highly competitive, technology driven freight transportation industry; and | | | | | | Ensure that all Landstar employees fully understand the requirements of their job and the role their job plays within Landstar. | | 13 [Table of Contents](#toc) Landstar formally monitors employee satisfaction and engagement through periodic employee satisfaction and engagement surveys. The Company also uses employee roundtable and focus group discussions as well as exit interviews to monitor engagement and satisfaction. Landstar provides comprehensive professional development opportunities to employees at all levels. Landstars learning and development department offers all employees the opportunity to participate in various learning tracks on topics including Leadership, Workplace Safety& Security, Customer Service and other core skills. Courses offered by the learning and development department are delivered by Landstars team of Association for Talent Development (ATD) certified trainers through both on-line and classroom settings. At our core, Landstar is about providing opportunity to qualified candidates and employees regardless of background. We do not tolerate discriminatory behavior and strongly believe that diverse perspectives and a collaborative culture lead to better business outcomes. The Company complies with all applicable federal and state laws pertaining to employment. Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of ethics and employee compliance code that set standards for appropriate behavior and includes required annual training. As of the end of 2025, a majority of the Companys employees work remotely or on a hybrid basis. Item1A. Risk Factors Operational Risks Increased severity or frequency of accidents and other claims or a material unfavorable development of existing claims. As noted above in Item 1, Business Factors Significant to the Companys Operations Self-Insured Claims, potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. Landstar retains liability through a self-insured retention for commercial trucking claims up to $5million per occurrence. Historically, these third party insurance arrangements were based on policy year periods beginning on May1 and ending on the subsequent April 30. Beginning with the policy year period commencing May1, 2025, the Company and its third party insurance providers adjusted the applicable policy year period, beginning in 2026, to commence on June1 and end on the subsequent May 31. All applicable third party insurance arrangements with a policy period ending April30, 2026 have been amended to provide for a policy period ending May31, 2026, as reflected below. Effective May1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5million and $10million (the 2023 Initial Excess Policy) with a third party insurance company. For commercial trucking claims incurred on or after May1, 2023 through May31, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18million over the thirty-seven-month term ending May31, 2026. After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5million, with an aggregate limit of $15million for the thirty-seven-month term ending May31, 2026. The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10million. These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past fifteen 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 $10million. 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. Since the annual policy year ended April30, 2020, as compared to the annual policy year ending May31, 2026, the Company experienced an increase of approximately $22 million, or approximately 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10million. In addition to the significant increase in the cost to motor carriers relating to commercial auto liability claims throughout the United States, there has also been a very significant increase throughout the United States in the number of, and potential loss exposure associated with, claims asserted against freight brokers in connection with accidents involving motor carriers the freight broker has engaged and contracted with to haul a shipment. The claims asserted against freight brokers often involve claims of 14 [Table of Contents](#toc) negligent selection of the motor carrier who was involved in the relevant accident. Within the transportation logistics industry, these matters are often referred to as Broker Liability Claims. For example, see the discussion of the Cabral Matter (as defined below) in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. There is currently significant legal uncertainty regarding Broker Liability Claims as state and federal courts across the United States are divided as to whether such claims are preempted by federal law under the FAAAA, or are subject to the safety exception under the FAAAA. The matter of Montgomery v. Caribe Transport II, LLC, in which the Company is not a party, is currently pending before the U.S. Supreme Court and may result in a ruling relating to federal preemption of Broker Liability Claims under the FAAAA. No assurances can be provided as to any such ruling by the U.S. Supreme Court, the timing thereof, or the impact any such ruling may have on pending or future Broker Liability Claims asserted against the Company, including the Cabral Matter. Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured 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 single hypothetical claim in the amount of $65million incurred during the annual policy year ending May31, 2026, the Company would have an aggregate financial exposure of approximately $36million. Within the Companys third party insurance arrangements providing excess coverage for commercial trucking liabilities, structured arrangements with third party reinsurers within a specific loss layer may include provisions that require additional payments of premium in the event of unfavorable loss experience or a refund of premium in the event of favorable loss experience. During the 2025 fiscal year, with respect to one such three-year commercial auto liability reinsurance arrangement relating to certain excess claims incurred between May1, 2020 through April30, 2023, the Company received $12,000,000 of cash payments from third party reinsurance providers in the form of a no claims bonus due to favorable loss experience with respect to claims incurred during the applicable policy period. As further described in Note 11 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K, in connection with the Judgment (as defined below) in the Cabral Matter, the Company has recorded the no claims bonus within current insurance claims in the consolidated balance sheet as of December27, 2025. The Company intends to vigorously appeal the Cabral Matter, including the Judgment; however, no assurances can be provided regarding whether the Company will ultimately be able to recognize a gain with respect to the no claims bonus. For more information about the Cabral Matter, see Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. Furthermore, the Companys 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 Landstars cost of insurance and claims and its results of operations. As noted below in Item 1, Legal, Tax, Regulatory and Compliance Risks Regulatory and legislative changes, several of the Operating Subsidiaries maintain a federal hazardous materials safety permit in connection with the Companys transportation of hazardous substances. In the event the Company is involved in a spill or other accident involving hazardous substances, there is a release of hazardous materials while such hazardous materials are being transported by the Company, or Landstar is found to be in violation of or fail to comply with applicable environmental laws or regulations in connection with the transportation of hazardous materials, the Company could be subject to clean-up costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a material adverse effect on the Companys business and results of operations. The Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers compensation claim and $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Companys 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 Companys 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 legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage. 15 [Table of Contents](#toc) In recent years, the amount and sophistication of fraud and cargo theft throughout the freight transportation and logistics supply chain has significantly increased. In particular, strategic cargo theft refers to instances when bad actors incorporate deceptive tactics to commit cargo theft.Such tactics may involve the use of fraud to deceive shippers, brokers, and/or carriers using a combination of methods including identity theft and impersonation, fictitious track-and-trace information, fictitious proof of delivery information and fraudulent carrier schemes. The Company has experienced, and may continue to experience, increases in the amount of cargo theft, including strategic cargo theft, resulting in increased exposure to liability from cargo claims. The Company has also experienced, and may continue to experience, incidences of other types of supply chain fraud, for example the fraud referenced in Note 19 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. A material increase in the frequency or severity of accidents, cargo claims, or workers compensation claims, claims in connection with the transportation of hazardous materials, or the material unfavorable development of existing claims could have a material adverse effect on Landstars business, cost of insurance and claims and its results of operations. Dependence on third party insurance companies. The Company is dependent on a limited number of third party insurance companies to provide insurance coverage in excess of its self-insured retention amounts. Historically, the Company has maintained insurance coverage for commercial trucking claims in excess of its self-insured retention, up to various maximum amounts, with a limited number of third party insurance companies. In an attempt to manage the cost of insurance and claims, the Company has historically increased or decreased the level of its financial exposure to commercial trucking claims by increasing or decreasing its level of self-insured retention based on the estimated cost differential between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of self-insured retention. Similarly, in its excess insurance layers, the Company may increase or decrease the level of its financial exposure to commercial trucking claims, including through the use of additional self-insurance as well as deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the estimated cost differential 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. To the extent that the third party insurance companies propose increases to their premiums for coverage of commercial trucking claims, the Company may decide to pay such increased premiums or increase its financial exposure on an aggregate, per occurrence or other basis, including by increasing the amount of its self-insured retention. In fact, in recent years, several of the largest third party insurers providing excess coverage for commercial trucking claims in the United States announced that in light of increased severity trends related to the increase in losses attributable to unfavorable verdicts, they would no longer provide such coverage. Decisions by these third party insurers to exit this line of business have had a significant negative impact on the availability and pricing of excess coverage for commercial trucking claims in the United States. No assurances can be given that other third party insurers will not also decide to exit the market as a provider of excess coverage for commercial trucking claims in the United States, which could have a further negative effect on the availability and pricing of such coverage. Accordingly, no assurance can be given that insurance coverage from third party insurers for claims in excess of the Companys current self-insured retentions will continue to be available on commercially reasonable terms. Dependence on independent commission sales agents. As noted above in Item 1, Business Factors Significant to the Companys Operations Agent Network, the Company markets its services primarily through independent commission sales agents. During fiscal year 2025, 457 agents generated revenue for Landstar of at least $1million each, or in the aggregate approximately 95% of Landstars consolidated revenue. Included among these Million Dollar Agents, 77 agents generated at least $10,000,000 of Landstar revenue during the 2025 fiscal year, or in the aggregate approximately 68% of Landstars consolidated revenue. Of these larger agencies, two such Landstar independent commission sales agencies each generated over 10% of Landstars consolidated revenue, or in the aggregate approximately $994,000,000, or 21%, of Landstars consolidated revenue and approximately 16% of Landstars consolidated variable contribution in fiscal year 2025. A number of these larger agencies, including the second largest of Landstars independent commission sales agents by revenue, maintain administrative operations in countries outside of North America where the risks may be different than in the United States or Canada due to geopolitical, legal or other risks associated with maintaining administrative operations in such foreign jurisdictions. There can be no assurance regarding the potential disruption and impact adverse geopolitical developments in these foreign jurisdictions could have on the ability of certain large independent commission sales agents to generate and maintain administrative operations in support of significant amounts of Landstar revenue. As disclosed in a Current Report on Form 8-K filed by the Company on February28, 2022, the second largest Landstar independent commission sales agency by 2025 revenue referenced above, while based in the United States, has significant administrative operations located in Ukraine. The administrative operations of this agency were significantly disrupted during the onset of the Russian invasion of Ukraine and continue to be affected by the ongoing conflict. The Company also has another of its largest independent commission sales agencies, as measured by revenue, that is based in the United States but conducts a portion of its administrative operations in 16 [Table of Contents](#toc) western Ukraine. Russian efforts to destroy infrastructure throughout Ukraine has impacted the availability of electricity and other basic utilities at various times throughout the country. The priority for Landstar and both of these agencies is the safety and well-being of these agencies Ukrainian workforces and their families. No assurances can be provided regarding the conflict between Russia and Ukraine and the extent of potential future operational disruption the conflict may have on either of these Landstar agencies and the related impact of these disruptions on the Company. Landstar competes with motor carriers and other third parties for the services of independent commission sales agents. Landstar has historically experienced very limited agent turnover in the number of its Million Dollar Agents. There can be no assurances, however, that Landstar will continue to experience very limited turnover of its Million Dollar Agents in the future. Landstars contracts with its agents, including its Million Dollar Agents, are typically terminable without cause upon 10 to 30 days notice by either party and generally contain significant but not unqualified restrictive covenants limiting the ability of a former agent to compete with Landstar for a specified period of time post-termination, and other restrictive covenants. The loss of some of the Companys Million Dollar Agents and/or a significant decrease in revenue generated by Million Dollar Agents could have a material adverse effect on Landstar, including its results of operations and revenue. Dependence on third party capacity providers. As noted above in Item 1, Business Factors Significant to the Companys Operations Third Party Capacity, Landstar does not own trucks or other transportation equipment other than trailing equipment and relies on third party capacity providers, including BCO Independent Contractors, Truck Brokerage Carriers, railroads and air and ocean cargo carriers, to transport freight for its customers. The Company competes with motor carriers and other third parties for the services of BCO Independent Contractors and other third party capacity providers. The market for qualified truck owner-operators and other third party truck capacity providers is very competitive among motor carriers, third party logistics companies and others and no assurances can be given that the Company will be able to maintain or expand the number of BCO Independent Contractors or other third party truck capacity providers. Additionally, the Companys third party capacity providers other than BCO Independent Contractors can be expected, under certain circumstances, to charge higher prices to cover increased operating expenses, such as any increases in the cost of fuel, labor, equipment or insurance, and the Companys operating income may decline without a corresponding increase in price to the customer. A significant decrease in available capacity provided by either the Companys BCO Independent Contractors or other third party capacity providers, or increased rates charged by other third party capacity providers that cannot be passed through to customers, could have a material adverse effect on Landstar, including its results of operations and revenue. Disruptions or failures in the Companys computer systems; cyber and other information security incidents. As noted above in Item 1, Business Factors Significant to the Companys Operations Technology, the Companys information technology systems used in connection with its operations are located in Jacksonville, Florida and to a lesser extent in Rockford, Illinois. In addition, the Company utilizes several third party data centers throughout the United States. Landstar relies, in the regular course of its business, on the proper operation of its information technology systems to link its extensive network of customers, employees, agents and third party capacity providers, including its BCO Independent Contractors. Moreover, a majority of the Companys employees work remotely or on a hybrid basis. Although the Company has redundant systems for its critical operations, any significant disruption or failure of its technology systems or those of third party data centers on which it relies could significantly disrupt the Companys operations and impose significant costs on the Company. Moreover, it is critical that the data processed by or stored in the Companys information technology systems or otherwise in the Companys possession remain confidential, as it often includes confidential, proprietary and/or competitively sensitive information regarding our customers, employees, agents and third party capacity providers, key financial and operational results and statistics, and our strategic plans, including technology innovations, developments and enhancements. Cyber incidents that impact the security, availability, reliability, speed, accuracy or other proper functioning of these systems and data, including outages, computer viruses, break-ins and similar disruptions, could have a significant impact on our operations. Accordingly, information security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access, including from AI enabled attacks, remain a priority for us. Our information systems and those of our third party service providers have been, and will likely continue to be, targeted by or subject to viruses, malware or other malicious codes, unauthorized access, cyber-attacks, cyber frauds, ransomware or other unauthorized occurrences which jeopardize the confidentiality, integrity or availability of our information or information systems. Cybersecurity threats are rapidly evolving and those threats and the means for obtaining access to our systems are becoming increasingly sophisticated. Cybersecurity threats can originate from a wide variety of sources including terrorists, nation states, financially motivated actors, hacktivists, internal actors, or third parties, such as external service providers or other third parties who may use an external service provider as a conduit to access our systems, and the techniques used change frequently and often are not recognized until after they have been launched. The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks including the deployment of artificial intelligence technologies by threat actors. Although we 17 [Table of Contents](#toc) believe that we have robust security procedures and other safeguards in place, as threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities. At any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we may discover vulnerabilities as we continuously work to enhance our cybersecurity risk management program. A significant incident, including system failure, security breach, disruption by malware or ransomware, or other damage, could interrupt or delay our operations, damage our reputation with customers, agents, third party capacity providers, employees, vendors, investors or other stakeholders, cause a loss of customers, agents and/or third party capacity providers, expose us to a risk of loss or litigation, and/or cause us to incur significant time and expense to remedy such an event, any of which could have a material adverse impact on our results of operations and financial condition. Although the Company maintains cybersecurity and business interruption insurance, the Companys insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems. In addition, cybersecurity and business interruption insurance could in the future become more expensive and difficult to maintain and may not be available on commercially reasonable terms or at all. Dependence on key vendors. As described above under Dependence on third party insurance companies and Disruptions or failures in the Companys computer systems; cyber and other information security incidents, the Company is dependent on certain vendors, including third party insurance companies, third party data center providers, third party information technology application providers and third party payment disbursement providers. Any inability to negotiate satisfactory terms with one of these key vendors or any other significant disruption to or termination of a relationship with one of these key vendors could disrupt the Companys operations and impose significant costs on the Company. Adoption of artificial intelligence (AI). The Company uses, and will continue to expand its use of, machine learning and AI technologies to deliver services and operate its business. If the Company fails to successfully integrate AI into its digital ecosystem and business processes, or if it fails to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers and programmers and cybersecurity personnel, the Company may face a competitive disadvantage. At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical or confidentiality concerns, reputational harm, and security risks. It is not possible to predict all of the risks related to the use of AI, and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect the Companys ability to develop and use AI or subject it to legal liability. The cost of complying with laws and regulations governing AI could be significant and could increase our operating expenses, which could adversely affect our business, financial condition, and results of operations. Further, market demand and acceptance of AI technologies, including by our independent commission sales agents and BCO Independent Contractors, are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our ecosystem of digital tools that are designed to: (i)assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of their independent businesses, (ii)assist customers in meeting their transportation needs, (iii)assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses, and (iv)improve operational and administrative efficiency throughout the Company. Acquisitions, Divestitures and Investments. The Company periodically considers acquisitions and equity investments that it believes are strategically important based on the potential that any such acquisition or investment candidate would further strengthen the Companys strategic goals and service offerings. The Company makes no assurance that it will be able to successfully achieve its strategic goals as it relates to any such acquisition or investment. Further, the Company may have difficulties integrating acquired companies or efficiently managing divestitures. For potential acquisitions, success may depend upon efficiently integrating the acquired business into our existing systems and operations. If we complete a large acquisition or multiple acquisitions within a short period of time, we may experience heightened difficulties integrating the acquired companies. The Company would also be required to integrate these acquired businesses into our internal control environment, which may present challenges that are different than those presented by organic growth and that may be difficult to manage. If we are unable to successfully integrate and grow any acquired businesses and to realize contemplated revenue synergies and cost savings from such acquisitions, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected. During 2017, the Company established Landstar Metro, S.A.P.I. de C.V. (Landstar Metro), which acquired substantially all of the assets of the asset-light transportation logistics business of Fletes Avella, S.A. de C.V. Landstar Metro provides freight and logistics services within Mexico and in conjunction with Landstars U.S.-Mexico cross-border services. The Companys initial investment in Landstar Metro was approximately $8.5million. The carrying value of the Companys investment in Landstar 18 [Table of Contents](#toc) Metro, as of December27, 2025, was approximately $6.5million, reflecting additional investment and the results of operations of Landstar Metro since inception, less non-cash impairment charges. Landstar Metro is subject to certain risks arising from doing business in Mexico, including: changes in Mexicos economic strength; changes in trade agreements, US-Mexico trade relations, or the imposition of tariffs on imports from Mexico and related retaliatory tariffs that may be imposed by the Mexican government; disruptions related to port of entry restrictions; difficulties in enforcing contractual obligations; foreign currency fluctuations; theft or vandalism of equipment; and social, political, and economic instability. As previously disclosed in a Current Report on Form 8-K, filed with the SEC on August13, 2025, in connection with an annual strategic review of the Companys operations, the Company determined that Landstar Metro has not been able to meet the Companys strategic or operational goals and expectations, and, in connection therewith, the Company entered into an arrangement with a financial advisor to actively market Landstar Metro and consider strategic alternatives for this business, which may involve a sale or other disposition in whole or in part of Landstar Metro. No assurances can be provided regarding any potential sale or other disposition of Landstar Metro and whether any additional non-cash impairment charges or other additional charges and expenses will be incurred by the Company in connection with this sale process or upon any ultimate disposition of Landstar Metro. Economic, Competitive and Industry Risks Decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs. The transportation industry historically has experienced cyclical financial results as a result of slowdowns in economic activity, the business cycles of customers, and other economic factors beyond Landstars control. If a slowdown in economic activity or a downturn in the Companys customers business cycles causes a reduction in the volume of freight shipped by those customers, the Companys operating results could be materially adversely affected. Moreover, Landstar hauls a significant number of shipments that have either been imported into the United States or are destined for export from the United States. There is significant uncertainty in the marketplace as to the potential actions of the U.S. government with respect to international trade policy, and the impact of tariffs may significantly adversely impact our customers, our industry, and our business. The U.S. government has made significant changes in U.S. trade policy, including the imposition on April2, 2025, of a baseline tariff of 10% on product imports from almost all countries and individualized higher tariffs on certain other countries. While the announcement of the tariffs has been followed by announcements of limited exceptions and temporary pauses, certain foreign governments either have taken or are threatening to take retaliatory actions in response. The changes in U.S. trade policy and tariffs have caused uncertainty and volatility in financial markets. Further, there is potential for significant disruption with respect to trade between the United States and, respectively, Mexico and Canada, in connection with the anticipated review in 2026 of the United States-Mexico-Canada Agreement and related potential impacts on trade, tariffs and border duties and taxes throughout North America. Moreover, on February 20, 2026, the U.S. Supreme Court ruled that the U.S. government cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs, overturning certain recent tariffs announced throughout 2025, including those on global imports from China, Canada and Mexico. This decision creates uncertainty about the immediate path forward for many supply chains, as billions of dollars in duties are now in question and the process for potential refunds remains unclear. Further, not all tariffs announced throughout 2025 will be impacted by this U.S. Supreme Court decision since many tariffs were imposed under other legal authorities that remain in effect and new tariffs may continue to be implemented through these other legal authorities. Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions, declining consumer confidence, inflation or an economic slowdown. These tariffs or other trade restrictions, including corresponding actions taken by other countries in response to U.S. governmental actions or continuing uncertainty around the timing, scope, level, magnitude, duration and product range of tariffs, could have an adverse economic impact in the markets in which the Company operates, could cause reduced demand for the Companys services and a reduction in the volume of shipments transported by the Companys network, and could have a material adverse effect on Landstars results of operations. Substantial industry competition. As noted above in Item 1, Business Factors Significant to the Companys Operations Competition, Landstar competes primarily in the transportation and logistics services industry. This industry is extremely competitive and fragmented. Landstar competes primarily with truckload carriers, intermodal transportation service providers, railroads, less-than-truckload carriers, third party logistics companies, freight brokers and other asset-light transportation and logistics service providers. Management believes that competition for the freight transported by the Company is based on service, efficiency, safety and freight rates, which are influenced significantly by the economic environment, particularly the amount of available transportation capacity and freight demand. In recent years, the use of technology and the implementation of technology-based innovations, which may increasingly incorporate AI, have become increasingly important to compete within the transportation and logistics industry.In particular, management believes leadership in the development, operation and support of an ecosystem of digital technologies and applications is an ongoing part of providing high quality service. The failure of the Company to maintain or enhance its technology ecosystem in response to changing demands from customers, agents, and capacity providers could have a significant adverse impact on Landstars ability to compete for customers, agents and capacity providers in the transportation and logistics industry. 19 [Table of Contents](#toc) In addition, competition in our industry, historically, has created downward pressure on freight rates. Many large shippers use 3PLs other than the Company to outsource the management and coordination of their transportation needs rather than directly arrange for transportation services with carriers. As noted above, there were eight transportation service providers, including 3PLs, included in the Companys top 25 customers for the fiscal year ended December27, 2025. Usage by large shippers of 3PLs often provides carriers, such as the Company, with a less direct relationship with the shipper and, as a result, may increase pressure on freight rates while making it more difficult for the Company to compete primarily based on service and efficiency. A prolonged decrease in freight rates could have a material adverse effect on Landstar, including its revenue and operating income. Legal, Tax, Regulatory and Compliance Risks Status of independent contractors. For many years, the topic of the classification of individuals as employees or independent contractors has garnered significant attention among federal and state regulators as well as the plaintiffs bar. Various legislative or regulatory proposals have been introduced at the federal and state levels that may affect the classification status of individuals as independent contractors or employees for either employment tax purposes (e.g., withholding, social security, Medicare and unemployment taxes) or other benefits available to employees (most notably, workers compensation benefits). Certain states (most prominently, California) have experienced significant activity by tax and other regulators and numerous class action lawsuits filed against transportation companies that engage independent contractors. There are many different tests and standards that may apply to the determination of whether a relationship is that of an independent contractor or one of employment. For example, different standards may be applied by the Internal Revenue Service, the U.S. Department of Labor, the National Labor Relations Board, state unemployment agencies, state departments of labor, state taxing authorities, the Equal Employment Opportunity Commission, state discrimination or disability benefit administrators and state workers compensation boards, among others. For federal tax purposes, most individuals are classified as employees or independent contractors based on a multi-factor common-law analysis rather than any definition found in the Internal Revenue Code or Internal Revenue Service regulations. In addition, under Section530 of the Revenue Act of 1978, a taxpayer that meets certain criteria may treat an individual as an independent contractor for employment tax purposes if the taxpayer has been audited without being told to treat similarly situated workers as employees, if the taxpayer has received a ruling from the Internal Revenue Service or a court decision affirming the taxpayers treatment of the individual as an independent contractor, or if the taxpayer is following a long-standing recognized practice. The Company classifies its BCO Independent Contractors and independent commission sales agents as independent contractors for all purposes, including employment tax and employee benefits. There can be no assurance that legislative, judicial, administrative or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change the employee/independent contractor classification of BCO Independent Contractors or independent commission sales agents doing business with the Company. Certain states, most notably California, have enacted laws codifying the strict ABC test for purposes of determining a workers status as an independent contractor or employee under that states law. Versions of the ABC test have existed in a number of other states over the years and have been challenged in various courts as violating the federal governments exclusive right to regulate trucking in certain areas of law and interstate commerce. The Company monitors these laws and what steps may be necessary or advisable to adapt to a changing legal and regulatory environment. Nevertheless, there remains significant uncertainty regarding how these types of laws will be interpreted and enforced by state and local governments as well as by courts. Potential changes, if any, that could impact the legal classification of the independent contractor relationship between the Company and BCO Independent Contractors or independent commission sales agents could have a material adverse effect on Landstars operating model. Further, the costs associated with any such potential changes could have a material adverse effect on the Companys results of operations and financial condition if Landstar were unable to pass through to its customers an increase in price corresponding to such increased costs. Moreover, class action litigation in this area against other transportation companies has resulted in significant damage awards and/or monetary settlements for workers who have been allegedly misclassified as independent contractors and the legal and other related expenses associated with litigating these cases can be substantial. Regulatory and legislative changes. As noted above in Item 1, Business Factors Significant to the Companys Operations Regulation, certain of the Operating Subsidiaries are motor carriers and/or property brokers authorized to arrange for transportation services by motor carriers which are regulated by the Federal Motor Carrier Safety Administration (FMCSA), an agency of the U.S. Department of Transportation, and by various state agencies. Several of the Operating Subsidiaries maintain a federal hazardous materials safety permit and, as a result, have an increased risk of compliance review by the FMCSA. Certain of the Operating Subsidiaries are licensed as Ocean Transportation Intermediaries by the U.S. Federal Maritime Commission as non-vessel-operating common carriers and/or as ocean freight forwarders. The Companys air transportation activities in the United States are subject to regulation by the U.S. Department of Transportation as an indirect air carrier. One of the Companys 20 [Table of Contents](#toc) subsidiaries is licensed by the U.S. Department of Homeland Security through the Bureau of U.S. Customs and Border Protection (U.S. Customs) as a customs broker. The Company is also subject to regulations and requirements relating to safety and security promulgated by, among others, the U.S. Department of Homeland Security through U.S. Customs and the Transportation Security Administration, the Canada Border Services Agency and various state and local agencies and port authorities. The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators. In particular, the FMCSA may propose regulatory changes that affect the operation of commercial motor carriers across the United States. For example, effective May20, 2025, the FMCSA established a new enforcement policy with respect to English language proficiency (ELP) requirements applicable to commercial motor vehicle drivers and the ability of such drivers to communicate effectively with law enforcement and understand highway traffic signs throughout the United States. In 2025, the FMCSA also proposed amendments to federal regulations applicable to the issuance by State Drivers Licensing Agencies (SDLAs) of CDLs to foreign-domiciled individuals in order to significantly limit the authority of SDLAs to issue and renew CDLs with respect to individuals domiciled in a foreign jurisdiction and/or who do not maintain a lawful immigration status in the United States.It is difficult to predict in what form FMCSA regulations may be implemented, modified or enforced and what impact any such regulations may have on motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company. No assurances can be given with respect to what impact new or revised motor carrier oversight programs implemented by the FMCSA could have on the Company, its motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company. Regulations focused on diesel emissions and other air quality matters. Focus on diesel emissions, climate change and related air quality matters has led to efforts by federal, state and local governmental agencies to support legislation and regulations to limit the amount of carbon emissions, including emissions created by diesel engines utilized in tractors such as those operated by the Companys BCO Independent Contractors and Truck Brokerage Carriers. Moreover, federal, state and local governmental agencies may also focus on regulation in relation to trailing equipment specifications in an effort to achieve, among other things, lower carbon emissions. For example, the California Air Resources Board (CARB) has implemented regulations that restrict the ability of certain tractors and trailers from operating in California and that impose emission standards on nearly all diesel-fueled trucks with gross vehicle weight ratings in excess of 14,000 lbs. that operate in California. Moreover, these emission standards have become increasingly stringent over time. As of January1, 2023, nearly all diesel-fueled trucks with gross vehicle weight ratings in excess of 14,000 lbs. that operate in California are required to have a 2010 or newer model year engine. No assurances can be given with respect to the extent BCO Independent Contractors will choose to become CARB-compliant by purchasing a new or used CARB-compliant tractor, replacing the engine in their existing tractor with a CARB-compliant engine or performing an exhaust retrofit of their existing tractor by installing a particulate matter filter. Accordingly, many of the Companys BCO Independent Contractors may choose not to haul loads that would require travel within California, which could affect the ability of the Company to service customer freight needs for freight originating from, delivering to or traveling through California. Furthermore, increased regulation of tractor or trailing equipment specifications, including emissions created by diesel engines, could create substantial costs for the Companys third party capacity providers and, in turn, increase the cost of purchased transportation to the Company. An increase in the costs to purchase, lease or maintain tractor or trailing equipment or in purchased transportation cost caused by existing or new regulations without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition. Regulations requiring the purchase and use of zero-emission vehicles (ZEVs). Currently, the long-haul trucking industry in North America is diesel-fuel based and long-haul trucking operations powered by electricity, natural gas, or hydrogen-based powertrains rather than diesel are not commercially feasible at scale in North America. Significant challenges remain with respect to the economic feasibility of these trucks and the further development of this technology is necessary considering power, torque, range, efficiency and other aspects of long-haul trucking operations. Moreover, the extensive nationwide charging/fueling infrastructure and maintenance network that would be necessary to support such operations does not exist. Nevertheless, federal, state and local governmental agencies may engage in efforts to support legislation and regulations mandating the transition of diesel-fuel based commercial motor vehicles, such as Class8 tractors operated by the Companys BCO Independent Contractors and Truck Brokerage Carriers, to ZEVs. 21 [Table of Contents](#toc) Mandates requiring the transition to ZEVs would create substantial costs for the Companys third party capacity providers and, in turn, increase the cost of purchased transportation to the Company. An increase in the costs to purchase, lease or maintain tractor equipment or in purchased transportation cost caused by existing or new regulations without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition. Moreover, irrespective of the enactment of these types of regulations, no assurances can be provided that the technology advancements that will need to occur to make ZEVs commercially viable for long-haul trucking or the extensive nationwide charging/fueling infrastructure and maintenance network that would be necessary to support such operations will develop in the time frame that would be necessary to enable efforts to comply with legislative or regulatory mandates requiring the transition of diesel fuel-based vehicles to ZEVs.It is not expected that long-haul trucking operations powered by electricity, natural gas, or hydrogen-based powertrains rather than diesel will become commercially viable at scale throughout North America in the next five years.However, as various technology alternatives continue to develop and mature and investment in infrastructure continues, local or regional service in certain geographic areas utilizing Class8 tractors powered by electricity, natural gas, or hydrogen-based powertrains may become commercially viable in such time frame.Landstar intends to continue to actively monitor developments in the trucking industry related to the design, manufacture, operation, and support of heavy-duty trucks powered by electricity, natural gas, or hydrogen-based powertrains in order to consider the implementation of initiatives involving those technologies, as those technologies and the related infrastructure needed to support them may mature in the future. An increase in costs to implement these initiatives without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition. Supply Chain Fraud Matter. As disclosed in a Current Report on Form 8-K filed with the SEC on April2, 2025 and the Companys Quarterly Report on Form 10-Q for the 2025 first quarter, filed with the SEC on May13, 2025, during the last week of the Companys 2025 first fiscal quarter, the Company identified a supply chain fraud relating to the Companys international freight forwarding operations (the Supply Chain Fraud Matter). The Supply Chain Fraud Matter did not involve the Companys core North American truckload services. The Companys financial results for the fiscal year ended December27, 2025 included a $4.8million pre-tax expense, or $0.10 per basic and diluted share, relating to this matter. This expense reflected the total anticipated aggregate adverse financial impact to Landstar relating to the fraud, net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries in the future. No assurance can be provided with respect to the Companys ability to collect anticipated recoveries relating to the Supply Chain Fraud Matter or the cost of legal and other professional fees that may be incurred by the Company in the future in connection with such collection efforts related to the Supply Chain Fraud Matter. The inability of the Company to recover additional amounts relating to the Supply Chain Fraud Matter could impose additional adverse financial impact and costs on the Company. Potential changes in taxes. From time to time, various legislative proposals are introduced to increase federal, state, or local taxes. The Company cannot predict whether, or in what form, any increase in corporate income tax rates, state tax rates, taxes related to the procurement of insurance, motor fuel tax rates or other tax rates applicable to the transportation services provided by the Company will be enacted and, if enacted, how such increased tax rates may impact the Company. As an example, for every 100 basis point increase in the U.S. corporate income tax rate, the Company would recognize a one-time tax charge of approximately $1,000,000 in connection with revaluing its ending net deferred tax liabilities at December27, 2025. With respect to potential increases in fuel and similar taxes, it is unclear whether or not the Companys Truck Brokerage Carriers would attempt to pass the increase on to the Company or if the Company will be able to reflect this potential increased cost of capacity, if any, in prices to customers. Any such increase in fuel taxes, without a corresponding increase in price to the customer, could have a material adverse effect on Landstar, including its results of operations and financial condition. Moreover, competition from other transportation service companies including those that provide non-trucking modes of transportation would likely increase if state or federal taxes on fuel were to increase without a corresponding increase in taxes imposed upon other modes of transportation. On August16, 2022, the Inflation Reduction Act was signed into law and established a one percent excise tax on stock repurchases made by publicly traded U.S. corporations. This provision was effective for tax years beginning after December31, 2022. Accrued excise tax of $1,762,000 was included in other current liabilities in the consolidated balance sheet at December27, 2025. The excise tax could have an adverse effect on the Companys cash flows in future years. General Risk Factors Intellectual property. The Company uses both internally developed and purchased technology in conducting its business. Whether internally developed or purchased, it is possible that the use of these technologies could be claimed to infringe upon or violate the intellectual property rights of third parties. In the event that a claim is made against the Company by a third party for the infringement of intellectual property rights, any settlement or adverse judgment against the Company either in the form of increased costs of licensing or a cease and desist order in using the technology could have an adverse effect on the Companys business and its results of operations. 22 [Table of Contents](#toc) Item1B. Unresolved Staff Comments None. Item1C. Cybersecurity The Company recognizes the importance of assessing, identifying, and managing risks associated with cybersecurity threats. These risks include, among other things, operational risks; intellectual property theft; fraud; extortion; harm to employees, customers or the independent commission sales agents and third party capacity providers in our network; violation of privacy or security laws and other litigation and legal risk; and reputational risks. The Company has implemented cybersecurity processes, technologies, and controls to aid in its efforts to assess, identify, and manage such risks, including network and endpoint monitoring by a third party managed security services provider and Landstar IT professionals, access controls, vulnerability assessments, penetration testing, regular information security training for employees, and tabletop exercises to inform our IT professionals risk identification and assessment. Landstar maintains an Incident Response Plan that guides the actions the Company is to take in the event of a suspected or confirmed cybersecurity incident. The plan includes processes to triage, investigate, contain, and remediate the incident, and is designed to enable us to comply with applicable legal and regulatory obligations and mitigate financial and reputational damage. We also maintain a Business Continuity Plan, which provides procedures for maintaining the continuity of critical business processes in the event of business interruption, including any that involve cybersecurity incidents that may significantly impact our operations. Our cybersecurity risk management processes incorporate appropriate industry standards and are designed using the frameworks developed by National Institute of Standards and Technology (NIST) as a guide. The Company has established a Management Risk Committee. The Management Risk Committee meets at least quarterly and considers cybersecurity threat risks alongside other types of risks as part of the Companys risk assessment and management process. Members of the Management Risk Committee regularly engage in discussions and meetings relating to cybersecurity risk management and strategy processes and the prevention, detection, mitigation and remediation of cybersecurity incidents. Members of our IT department collaborate with the Management Risk Committee, as necessary, to gather insights for identifying and assessing cybersecurity threats, their severity, and potential mitigations. Our cybersecurity risk management and strategy processes are led by the Chief Information Officer and the Chief Information Security Officer, who are each members of the Management Risk Committee. The Company has also established an Executive Risk Committee that meets monthly and focuses on enterprise risk management. The Executive Risk Committee is comprised of the Chief Executive Officer, the Chief Financial Officer, the Chief Safety and Operations Officer and the General Counsel. The Chief Information Officer and the Chief Information Security Officer regularly meet with the Executive Risk Committee to review and consider cybersecurity-related risks from an enterprise risk management perspective. The Chief Information Security Officer leads a team of IT professionals that includes individuals with significant cybersecurity expertise. The Chief Information Security Officer has over 30 years of experience in cybersecurity and information technology across multiple publicly traded organizations, with the responsibility for leading and managing cybersecurity, developing cybersecurity strategy, and designing and implementing effective cybersecurity programs.Prior to joining the Company in June 2025, the Chief Information Security Officer served as Chief Information Security Officer of LL Flooring. The team of IT professionals led by the Chief Information Security Officer includes individuals with relevant academic credentials and industry-recognized certifications, including Certified Information Security Systems Professional (CISSP), GIAC Foundational Cybersecurity Technologies (GFACT), GIAC Certified Incident Handler Certification (GCIH), GIAC Security Essentials (GSEC), ITIL 4 Foundations, Qualys Certified SpecialistVulnerability Management Detection& Response, Microsoft Technology Associate: Security Fundamentals, Google Cloud Certified: Professional Cloud Security Engineer, Cisco Certified CyberOps Associate, Cisco Certified Network Associate (CCNA), CompTIA Security+, and CompTIA Pentest+. The Company also regularly engages with consultants, auditors, and other third parties, including by having an independent third party Qualified Security Assessor review our cybersecurity program twice each year to help identify areas for continued focus and enhancement. These third parties analyze data on the interactions of users of our information technology resources, including employees, and conduct penetration tests and vulnerability scanning exercises to assess the performance of our cybersecurity controls, systems and processes. 23 [Table of Contents](#toc) Our cybersecurity risk management processes also address risks associated with our use of third party service providers, including those who have access to our employee data or our systems that support customers and our network of independent commission sales agents and third party capacity providers. Third party risks are included within our enterprise risk management assessment program, as well as our cybersecurity-specific risk identification program. Cybersecurity considerations affect the selection and oversight of our third party service providers. We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threats identified through such diligence. Additionally, we may require certain third parties to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. During the period covered by this Annual Report, the Company has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, institutions like us, as well as our employees, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of increasingly sophisticated cyber attacks. The Company describes whether and how risks from identified cybersecurity threats materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading Disruptions or failures in the Companys computer systems; cyber and other information security incidents included as part of our risk factor disclosure at Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein. Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. The Safety and Risk Committee of the Board is responsible for the oversight of risks from cybersecurity threats. At least semi-annually, the Management Risk Committee and, subsequently, the Safety and Risk Committee of the Board receive an overview of our cybersecurity threat risk management and strategy processes from the Chief Information Officer and Chief Information Security Officer. These sessions typically cover topics such as data security posture, results from third party assessments, progress towards risk-mitigation-related goals, our incident response plan, cybersecurity vendors and products, and material risks from cybersecurity threats, incidents and developments, as well as the steps management has taken to respond to such risks. Material cybersecurity threat risks are also considered during separate Board and Board committee meeting discussions relating to matters such as enterprise risk management, IT strategy, internal controls over financial reporting and business continuity planning. Item2. Properties The Company owns or leases various properties in the U.S., Canada and Mexico for the Companys operations and administrative staff that support its independent commission sales agents, BCO Independent Contractors and other third party capacity providers. The transportation logistics segments primary facilities are located in Jacksonville, Florida and Rockford, Illinois. In addition, the Companys corporate headquarters are located in Jacksonville, Florida. The Company also maintains a key freight staging and transload facility in Laredo, Texas. The Jacksonville, Florida, Rockford, Illinois and Laredo, Texas facilities are owned by the Company. The Company also maintains a network of owned and leased field operations centers in the United States and Canada in support of the ongoing recruitment and retention of its BCO Independent Contractors. Management believes that Landstars owned and leased properties are adequate for its current needs and that leased properties can be retained or replaced at an acceptable cost. Item3. Legal Proceedings See Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. Item4. Mine Safety Disclosures Not applicable. 24 [Table of Contents](#toc) PART II Item5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Common Stock of the Company is listed and traded on the NASDAQ Global Select Market under the symbol LSTR. The reported last sale price per share of the Common Stock as reported on the NASDAQ Global Select Market on January23, 2026 was $153.94 per share. As of such date, Landstar had 34,058,726 shares of Common Stock outstanding and had 148 stockholders of record of its Common Stock. However, the Company estimates that it has a significantly greater number of stockholders because a substantial number of the Companys shares are held by brokers or dealers for their customers in street name. Purchases of Equity Securities by the Company The following table provides information regarding the Companys purchase of its Common Stock during the period from September28, 2025 to December27, 2025, the Companys fourth fiscal quarter: | | | Fiscal Period | | TotalNumberofSharesPurchased | | | Average PricePaidPerShare(1) | | | Total Number ofShares Purchased asPart of PubliclyAnnouncedPrograms | | | MaximumNumberofShares That May YetBe Purchased Underthe Programs | | | | September27, 2025 | | | | | | 1,552,813 | | | | Sept. 28, 2025 Oct. 25, 2025 | | | | | | $ | | | | | | | | | 1,552,813 | | | | Oct. 26, 2025 Nov. 22, 2025 | | | 230,462 | | | | 127.11 | | | | 230,462 | | | | 1,322,351 | | | | Nov. 23, 2025 Dec. 27, 2025 | | | 56,233 | | | | 130.39 | | | | 56,233 | | | | 1,266,118 | | | | | | | | | | | | | | | | | | | Total | | | 286,695 | | | $ | 127.76 | | | | 286,695 | | | | | | | | | | | | | | | | | | | | (1) | The average price paid per share does not include the 1% excise tax on net stock repurchases, as applicable. | | On December7, 2021, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,912,824 shares of the Companys Common Stock from time to time in the open market and in privately negotiated transactions. This program was completed during fiscal year 2025. On December6, 2022, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,900,826 additional shares of the Companys Common Stock from time to time in the open market and in privately negotiated transactions. On December4, 2023, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 319,332 additional shares of its Common Stock from time to time in the open market and in privately negotiated transactions under its share purchase program. As of December27, 2025, the Company had authorization to purchase in the aggregate up to 1,266,118 shares of its Common Stock under these programs. No specific expiration date has been assigned to the December6, 2022 or December4, 2023 authorizations. Equity Compensation Plan Information The Company maintains a stock compensation plan for members of its Board of Directors, the 2022 Directors Stock Compensation Plan (the 2022 DSCP), and an employee equity incentive plan, the 2011 Equity Incentive Plan (the 2011 EIP). The following table presents information related to securities authorized for issuance under these plans at December27, 2025: | | | Plan Category | | NumberofSecuritiesto be Issued UponExercise ofOutstandingOptions | | | Weighted-averageExercise Price ofOutstandingOptions | | | Number of SecuritiesRemainingAvailableforFuture Issuance UnderEquity CompensationPlans | | | | Equity Compensation Plans Approved by Security Holders | | | 0 | | | | 0 | | | | 2,854,641 | | | | Equity Compensation Plans Not Approved by Security Holders | | | 0 | | | | 0 | | | | 0 | | | Under the 2011 EIP, the issuance of (i)a non-vested share of Landstar Common Stock issued in the form of restricted stock and (ii)a share of Landstar Common Stock issued upon the vesting of a previously granted restricted stock unit each counts as the issuance of two securities against the number of securities available for future issuance. Included in the number of securities remaining available for future issuance under equity compensation plans were 172,859 shares of Common Stock reserved for issuance under the 2022 DSCP. 25 [Table of Contents](#toc) Financial Model Shareholder Returns The following graph illustrates the return that would have been realized, assuming reinvestment of dividends, by an investor who invested $100 in each of the Companys Common Stock, the Standard and Poors 500 Stock Index and the Dow Jones Transportation Stock Index for the period commencing December26, 2020 through December27, 2025. 26 [Table of Contents](#toc) Item 6.Reserved Item7. Managements Discussion and Analysis of Financial Condition and Results of Operations 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 Managements Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Form 10-K contain forward-looking statements, such as statements which relate to Landstars 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: decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs; 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; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Companys second largest such agent by revenue in the 2025 fiscal year; substantial industry competition; disruptions or failures in the Companys computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; acquisitions and investments; and other operational, financial or legal risks or uncertainties detailed in this and Landstars other SEC filings from time to time and described in Item 1A in this Form 10-K under the heading Risk Factors. 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), is a 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 customers 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 Companys services emphasize safety, cargo security, information coordination and customer service and are delivered through a network of approximately 960 independent commission sales agents and over 70,000 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 Companys 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. Landstars independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstars capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Companys 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 Landstars ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.7billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment. The transportation logistics segment provides a wide range of integrated transportation management solutions. Transportation services are provided by Landstars 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 Landstar Blue, LLC. 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 27 [Table of Contents](#toc) delivery of time-critical freight, heavy-haul/specialized, hazardous materials (haz-mat), cold chain/temperature-controlled, 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, military equipment and general commodities. 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 fiscal year 2025, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 53% and 2%, respectively, of the Companys consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Companys consolidated revenue during fiscal year 2025. 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 Landstars Operating Subsidiaries. In addition, it reinsures certain risks of the Companys BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstars 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 Companys consolidated revenue for fiscal year 2025. Changes in Financial Condition and Results of Operations Management believes the Companys success principally depends on its ability to generate freight through its network of independent commission sales agents and to deliver freight safely, securely and efficiently utilizing BCO Independent Contractors and other third party capacity providers. Management believes the most significant factors to the Companys success include increasing revenue, sourcing capacity, empowering its network through technology-based tools and controlling costs, including insurance and claims. 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. Managements emphasis with respect to revenue growth is on revenue generated by independent commission sales agents who on an annual basis generate $1million or more of Landstar revenue. 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. The following table shows the number of Million Dollar Agents, the average revenue generated by these agents and the percent of consolidated revenue generated by these agents during the past three fiscal years: | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | Number of Million Dollar Agents | | | 457 | | | | 485 | | | | 524 | | | | | | | | | | | | | | | | | | Average revenue generated per Million Dollar Agent | | $ | 9,827,000 | | | $ | 9,388,000 | | | $ | 9,645,000 | | | | | | | | | | | | | | | | | | Percent of consolidated revenue generated by Million Dollar Agents | | | 95 | % | | | 94 | % | | | 95 | % | | | | | | | | | | | | | | | | In fiscal year 2025, the change in the number of Million Dollar Agents was primarily attributable to agents who remained with the Company yet experienced lower year-over-year revenue that resulted in such agents moving below the Million Dollar Agent category due to the soft freight demand environment. Included among the Companys Million Dollar Agents in the 2025 fiscal year, the Company had 77 independent sales agencies that generated at least $10million in Landstar revenue. In fiscal year 2024, the change in the number of Million Dollar Agents was primarily attributable to agents who remained with the Company yet experienced lower year-over-year revenue that resulted in such agents moving below the Million Dollar Agent category due to the soft freight demand environment. Included among the Companys Million Dollar Agents in the 2024 fiscal year, the Company had 81 independent sales agencies that generated at least $10million in Landstar revenue. 28 [Table of Contents](#toc) The change in the number of Million Dollar Agents on a year-over-year basis is influenced by many factors and is not solely the result of terminations of contractual relationships between agents and the Company, whether such terminations are initiated by the agent or the Company. Such other factors include consolidations among agencies or transactions in connection with ownership changes often due to retirement planning, estate planning or similar transitional matters. The change in the number of Million Dollar Agents on a year-over-year basis may also be affected by agents that remain with the Company yet experienced lower year-over-year revenue that resulted in such agent moving below the Million Dollar Agent category. Historically, the Company has experienced very few terminations of its Million Dollar Agents, whether such terminations are initiated by the agent or the Company. Annual terminations of Million Dollar Agents have typically been less than 3% of the total number of Million Dollar Agents.Revenue from accounts formerly handled by terminated Million Dollar Agents is often retained by the Company as the customer may choose to transfer its account to an existing Landstar agent. 29 [Table of Contents](#toc) 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 for the past three fiscal years: | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | Revenue generated through (in thousands): | | | | | | Truck transportation | | | | | | Truckload: | | | | | | Van equipment | | $ | 2,328,386 | | | $ | 2,447,810 | | | $ | 2,742,281 | | | | Unsided/platform equipment | | | 1,527,802 | | | | 1,455,663 | | | | 1,490,393 | | | | Less-than-truckload | | | 95,856 | | | | 99,828 | | | | 117,683 | | | | Other truck transportation (1) | | | 383,970 | | | | 343,253 | | | | 479,173 | | | | | | | | | | | | | | | | | | Total truck transportation | | | 4,336,014 | | | | 4,346,554 | | | | 4,829,530 | | | | Rail intermodal | | | 87,164 | | | | 84,328 | | | | 98,297 | | | | Ocean and air cargo carriers | | | 241,433 | | | | 289,902 | | | | 266,638 | | | | Other (2) | | | 79,149 | | | | 98,461 | | | | 108,857 | | | | | | | | | | | | | | | | | | | $ | 4,743,760 | | | $ | 4,819,245 | | | $ | 5,303,322 | | | | | | | | | | | | | | | | | | Revenue on loads hauled via BCO Independent Contractors included in total truck transportation | | $ | 1,803,514 | | | $ | 1,821,989 | | | $ | 1,998,408 | | | | Number of loads: | | | | | | Truck transportation | | | | | | Truckload: | | | | | | Van equipment | | | 1,124,539 | | | | 1,170,772 | | | | 1,259,578 | | | | Unsided/platform equipment | | | 487,060 | | | | 476,815 | | | | 504,765 | | | | Less-than-truckload | | | 151,518 | | | | 153,253 | | | | 175,650 | | | | Other truck transportation (1) | | | 180,683 | | | | 160,120 | | | | 201,407 | | | | | | | | | | | | | | | | | | Total truck transportation | | | 1,943,800 | | | | 1,960,960 | | | | 2,141,400 | | | | Rail intermodal | | | 29,970 | | | | 27,970 | | | | 29,620 | | | | Ocean and air cargo carriers | | | 31,120 | | | | 34,440 | | | | 32,820 | | | | | | | | | | | | | | | | | | | | 2,004,890 | | | | 2,023,370 | | | | 2,203,840 | | | | | | | | | | | | | | | | | | Loads hauled via BCO Independent Contractors included in total truck transportation | | | 798,050 | | | | 814,150 | | | | 898,610 | | | | Revenue per load: | | | | | | Truck transportation | | | | | | Truckload: | | | | | | Van equipment | | $ | 2,071 | | | $ | 2,091 | | | $ | 2,177 | | | | Unsided/platform equipment | | | 3,137 | | | | 3,053 | | | | 2,953 | | | | Less-than-truckload | | | 633 | | | | 651 | | | | 670 | | | | Other truck transportation (1) | | | 2,125 | | | | 2,144 | | | | 2,379 | | | | Total truck transportation | | | 2,231 | | | | 2,217 | | | | 2,255 | | | | Rail intermodal | | | 2,908 | | | | 3,015 | | | | 3,319 | | | | Ocean and air cargo carriers | | | 7,758 | | | | 8,418 | | | | 8,124 | | | | Revenue per load on loads hauled via BCO Independent Contractors | | $ | 2,260 | | | $ | 2,238 | | | $ | 2,224 | | | | Revenue by capacity type (as a % of total revenue): | | | | | | Truck capacity providers: | | | | | | BCO Independent Contractors | | | 38 | % | | | 38 | % | | | 38 | % | | | Truck Brokerage Carriers | | | 53 | % | | | 52 | % | | | 53 | % | | | Rail intermodal | | | 2 | % | | | 2 | % | | | 2 | % | | | Ocean and air cargo carriers | | | 5 | % | | | 6 | % | | | 5 | % | | | Other | | | 2 | % | | | 2 | % | | | 2 | % | | | (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. | | 30 [Table of Contents](#toc) Expenses Purchased transportation Also critical to the Companys 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 as of the end of the three most recent fiscal years: | | | | | Dec. 27,2025 | | | Dec. 28,2024 | | | Dec. 30,2023 | | | | BCO Independent Contractors | | | 7,712 | | | | 8,082 | | | | 9,024 | | | | Truck Brokerage Carriers: | | | | | | Approved and active (1) | | | 36,852 | | | | 43,718 | | | | 49,111 | | | | Other approved | | | 25,938 | | | | 26,527 | | | | 27,524 | | | | | | | | | | | | | | | | | | | | 62,790 | | | | 70,245 | | | | 76,635 | | | | | | | | | | | | | | | | | | Total available truck capacity providers | | | 70,502 | | | | 78,327 | | | | 85,659 | | | | | | | | | | | | | | | | | | Trucks provided by BCO Independent Contractors | | | 8,514 | | | | 8,843 | | | | 9,809 | | | | (1) | Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal year 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, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and recruiting and qualification costs for BCO Independent Contractors are the largest components of other operating costs. Also included in other operating costs are trailer rental costs and gains/losses, if any, on sales of Company-owned trailing equipment. As further described in Note 18 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K, during the last week of the Companys 2025 first fiscal quarter, the Company identified a supply chain fraud relating to the Companys international freight forwarding operations (the Supply Chain Fraud Matter). Other operating costs during the fiscal year ended December27, 2025 included a $4.8million expense relating to this matter. In addition, legal and other professional fees included in selling, general and administrative costs were slightly elevated during the Companys 2025 fiscal year in connection with this matter. 31 [Table of Contents](#toc) 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. Landstar retains liability through a self-insured retention for commercial trucking claims up to $5million per occurrence. The Company also maintains third party insurance arrangements providing coverage for commercial trucking liabilities in excess of $5million. Historically, these third party insurance arrangements were based on policy year periods beginning on May1 and ending on the subsequent April 30. Beginning with the policy year period commencing May1, 2025, the Company and its third party insurance providers adjusted the applicable policy year period, beginning in 2026, to commence on June1 and end on the subsequent May 31. All applicable third party insurance arrangements with a policy period ending April30, 2026, have been amended to provide for a policy period ending May31, 2026, as reflected below. Effective May1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5million and $10million (the 2023 Initial Excess Policy) with a third party insurance company. For commercial trucking claims incurred on or after May1, 2023 through May31, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18million over the thirty-seven-month term ending May31, 2026. After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5million, with an aggregate limit of $15million for the thirty-seven-month term ending May31, 2026. The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10million. These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past fifteen 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 $10million. 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. Since the annual policy year ended April30, 2020, as compared to the annual policy year ending May31, 2026, the Company experienced an increase of approximately $22million, or approximately 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10million. Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured 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 single hypothetical claim in the amount of $65million incurred during the annual policy year ending May31, 2026, the Company would have an aggregate financial exposure of approximately $36million. Within the Companys third party insurance arrangements providing excess coverage for commercial trucking liabilities, structured arrangements with third party reinsurers within a specific loss layer may include provisions that require additional payments of premium in the event of unfavorable loss experience or a refund of premium in the event of favorable loss experience. During the 2025 fiscal year, with respect to one such three-year commercial auto liability reinsurance arrangement relating to certain excess claims incurred between May1, 2020 through April30, 2023, the Company received $12,000,000 of cash payments from third party reinsurance providers in the form of a no claims bonus due to favorable loss experience with respect to claims incurred during the applicable policy period. As further described in Note 11 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K, in connection with the Judgment (as defined below) in the Cabral Matter, the Company has recorded the no claims bonus within current insurance claims in the consolidated balance sheet as of December27, 2025. The Company intends to vigorously appeal the Cabral Matter, including the Judgment; however, no assurances can be provided regarding whether the Company will ultimately be able to recognize a gain with respect to the no claims bonus. For more information about the Cabral Matter, see Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. 32 [Table of Contents](#toc) Furthermore, the Companys 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 Landstars cost of insurance and claims and its results of operations. Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers compensation claim and $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Companys 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 Companys 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 legal defenses and other 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 Landstars cost of insurance and claims and its results of operations. Selling, general and administrative During the 2025 fiscal year, employee compensation and benefits accounted for approximately 62% of the Companys 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. Impairment of intangible and other assets During the 2025 fiscal year, the Company recorded certain non-cash, non-recurring impairment charges of $32,170,000 in the aggregate (the Non-Cash Impairment Charges). The Non-Cash Impairment Charges, net of tax benefit, unfavorably impacted EPS by $0.71 per basic and diluted share. The Non-Cash Impairment Charges consisted of: | | | | $18,208,000, or $0.40 per basic and diluted share, in impairment charges to goodwill and certain other assets related to the Companys decision to actively market for sale Landstar Metro, S.A.P.I. de C.V., the Companys wholly-owned Mexican operating subsidiary, principally engaged in intra-Mexico truck transportation services. For additional information, see Note 14 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. | | | | | | $8,963,000, or $0.20 per basic and diluted share, in impairment charges related to the decision to select one of the Companys transportation management systems as its primary such system for truckload brokerage services and, in connection with that decision, wind-down an alternative transportation management system currently in use by Landstar Blue, LLC, one of the Companys operating subsidiaries. For additional information, see Note 15 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. | | | | | | $4,999,000 or $0.11 per basic and diluted share, relating to the carrying value of a non-controlling equity investment made by the Company in 2022 in Cavnue, LLC, a privately held technology start-up company. For additional information, see Note 16 in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. | | Costs of revenue The Company incurs costs of revenue related to the transportation of freight and, to a much lesser extent, to 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 33 [Table of Contents](#toc) 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, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and BCO Independent Contractor recruiting and qualification costs, as reported in the Companys Consolidated Statements of Income, (ii)transportation-related insurance premiums paid and claim costs incurred, included as a portion of insurance and claims in the Companys 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 the Companys 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 Companys Consolidated Statements of Income; and (iv)depreciation on Company-owned trailing equipment, included as a portion of depreciation and amortization in the Companys 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 Companys 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 Companys financial performance and in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs. 34 [Table of Contents](#toc) The reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin are each presented below: | | | | | Fiscal Year | | | | | | 2025 | | | 2024 | | | 2023 | | | | Revenue | | $ | 4,743,760 | | | $ | 4,819,245 | | | $ | 5,303,322 | | | | Costs of revenue: | | | | | | Purchased transportation | | | 3,688,343 | | | | 3,745,241 | | | | 4,068,262 | | | | Commissions to agents | | | 387,397 | | | | 392,751 | | | | 462,668 | | | | | | | | | | | | | | | | | | Variable costs of revenue | | | 4,075,740 | | | | 4,137,992 | | | | 4,530,930 | | | | Trailing equipment depreciation | | | 27,195 | | | | 27,950 | | | | 31,319 | | | | Information technology costs | | | 13,675 | | | | 22,744 | | | | 25,486 | | | | Insurance-related costs (1) | | | 161,370 | | | | 115,764 | | | | 116,069 | | | | Other operating costs | | | 61,586 | | | | 58,781 | | | | 54,191 | | | | | | | | | | | | | | | | | | Other costs of revenue | | | 263,826 | | | | 225,239 | | | | 227,065 | | | | | | | | | | | | | | | | | | Total costs of revenue | | | 4,339,566 | | | | 4,363,231 | | | | 4,757,995 | | | | | | | | | | | | | | | | | | Gross profit | | $ | 404,194 | | | $ | 456,014 | | | $ | 545,327 | | | | | | | | | | | | | | | | | | Gross profit margin | | | 8.5 | % | | | 9.5 | % | | | 10.3 | % | | | Plus: other costs of revenue | | | 263,826 | | | | 225,239 | | | | 227,065 | | | | | | | | | | | | | | | | | | Variable contribution | | $ | 668,020 | | | $ | 681,253 | | | $ | 772,392 | | | | | | | | | | | | | | | | | | Variable contribution margin | | | 14.1 | % | | | 14.1 | % | | | 14.6 | % | | | (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 Companys 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 Companys 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 Companys 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 Companys 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 43% of the Companys consolidated revenue in fiscal year 2025 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 57% 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 Companys 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 understand the underlying trends in the Companys results of operations; (iii)this measure is meaningful to 35 [Table of Contents](#toc) investors evaluations of the Companys 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. | | | | | Fiscal Year | | | | | | 2025 | | | 2024 | | | 2023 | | | | Gross profit | | $ | 404,194 | | | $ | 456,014 | | | $ | 545,327 | | | | Operating income | | $ | 151,577 | | | $ | 248,907 | | | $ | 344,149 | | | | Operating income as % of gross profit | | | 37.5 | % | | | 54.6 | % | | | 63.1 | % | | | Variable contribution | | $ | 668,020 | | | $ | 681,253 | | | $ | 772,392 | | | | Operating income | | $ | 151,577 | | | $ | 248,907 | | | $ | 344,149 | | | | Operating income as % of variable contribution | | | 22.7 | % | | | 36.5 | % | | | 44.6 | % | | The decrease in operating income as a percentage of gross profit from fiscal year 2024 to fiscal year 2025 resulted from the decrease of operating income at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the impairment of certain intangible and other assets and the impact of the Companys fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base. The decrease in operating income as a percentage of gross profit from fiscal year 2023 to fiscal year 2024 resulted from the decrease of operating income at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the Companys fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base. The decrease in operating income as a percentage of variable contribution from fiscal year 2024 to fiscal year 2025 resulted from the decrease of operating income at a more rapid percentage rate than the decrease in variable contribution, primarily due to the impact of increased insurance and claims costs, the impact of the impairment of certain intangible and other assets and the impact of the Companys fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller variable contribution base. The decrease in operating income as a percentage of variable contribution from fiscal year 2023 to fiscal year 2024 resulted from the decrease of operating income at a more rapid percentage rate than the decrease in variable contribution, primarily due to the impact of the Companys fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller 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 Managements Discussion and Analysis of Financial Condition and Results of Operations considers the Companys 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 Companys 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. Fiscal Year Ended December27, 2025 Compared to Fiscal Year Ended December28, 2024 Revenue for fiscal year 2025 was $4,743,760,000, a decrease of $75,485,000, or 2%, compared to fiscal year 2024. Transportation revenue decreased $70,893,000, or 1%. The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 1%, while revenue per load was approximately the same as compared to fiscal year 2024. Reinsurance premiums were $58,645,000 and $63,237,000 for fiscal years 2025 and 2024, respectively. The decrease in revenue from reinsurance premiums was primarily attributable to a decrease in the average number of trucks provided by BCO Independent Contractors in fiscal year 2025 compared to fiscal year 2024. 36 [Table of Contents](#toc) Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the third party truck capacity providers) for fiscal year 2025 was $4,336,014,000, representing 91% of total revenue, a decrease of $10,540,000, or less than 1%, compared to fiscal year 2024. The number of loads hauled by third party truck capacity providers decreased approximately 1% in fiscal year 2025 compared to fiscal year 2024, while revenue per load on loads hauled by third party truck capacity providers increased approximately 1% compared to fiscal year 2024. The decrease in the number of loads hauled via truck compared to fiscal year 2024 was primarily due to decreased demand from fiscal year 2024 for the Companys van and less-than-truckload transportation services. Loads hauled via van equipment decreased 4% and less-than-truckload loadings decreased 1%, while loads hauled via other truck transportation services increased 13% and loads hauled via unsided/platform equipment increased 2% as compared to fiscal year 2024. The increase in revenue per load on loads hauled via truck was primarily due to increased revenue per load on loads hauled via unsided/platform equipment, which was entirely attributable to an increase in the percentage of revenue contributed by heavy/specialized equipment, which typically has a higher revenue per load than unsided/platform loadings transported using standard flatbed and other less specialized pieces of platform equipment. Revenue per load on loads hauled via unsided/platform equipment increased 3%, while revenue per load on less-than-truckload loadings decreased 3%, on loads hauled via van equipment decreased 1% and on other truck transportation services decreased 1% as compared to fiscal year 2024. 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 $108,709,000 and $118,295,000 in fiscal years 2025 and 2024, respectively. It should be noted that billings to many customers of the Companys truck brokerage services include a single all-in rate and do 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 fiscal year 2025 was $328,597,000, or 7% of total revenue, a decrease of $45,633,000, or 12%, compared to fiscal year 2024. Revenue per load on revenue generated by multimode capacity providers decreased approximately 10% in fiscal year 2025 compared to fiscal year 2024, and the number of loads hauled by multimode capacity providers decreased approximately 2% over the same period. Revenue per load on loads hauled via rail intermodal and ocean decreased approximately 4% and 8%, respectively, while revenue per load on loads hauled via air increased approximately 14% during fiscal year 2025 as compared to fiscal year 2024. The decrease in revenue per load on loads hauled by rail intermodal carriers was broad-based with decreases at multiple customers during fiscal year 2025. The decrease in revenue per load on loads hauled by ocean was primarily attributable to the loss of one specific customer during fiscal year 2025 in connection with the Supply Chain Fraud Matter. The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to increases at several specific customers during fiscal year 2025. 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 12% decrease in ocean loadings and a 4% decrease in air loadings, while rail loadings increased 7%. The 12% decrease in ocean loadings was broad-based with decreases at several customers. The 4% decrease in air loadings was primarily attributable to decreases at several specific customers. The 7% increase in rail loadings was primarily attributable to increased loadings at one specific agency. Purchased transportation was 77.8% and 77.7% of revenue in fiscal years 2025 and 2024, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to an increased rate of purchased transportation on revenue generated by Truck Brokerage Carriers. Commissions to agents were 8.2% and 8.1% of revenue in fiscal years 2025 and 2024, 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 multimode capacity providers. Investment income was $13,685,000 and $14,810,000 in fiscal years 2025 and 2024, respectively. The decrease in investment income was attributable to lower average rates of return on investments in fiscal year 2025, partially offset by a higher average investment balance held by the insurance segment during fiscal year 2025. 37 [Table of Contents](#toc) Other operating costs increased $2,805,000 in fiscal year 2025 compared to fiscal year 2024. The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs, partially offset by a decreased provision for contractor bad debt. Insurance and claims increased $45,507,000 in fiscal year 2025 compared to fiscal year 2024. The highly elevated increase in insurance and claims expense compared to the prior year was primarily due to (i)an increase of $23,258,000 in net unfavorable development of prior years claims in fiscal year 2025 compared to fiscal year 2024, as further described below; (ii)increased severity of current year trucking and cargo claims in fiscal year 2025 compared to fiscal year 2024, including $11.0million related to two separate tragic vehicular accidents which occurred during the 2025 fourth fiscal quarter; and (iii)a $5.3million increase in the Companys actuarily determined claim reserves relating to the anticipated loss exposure for claims above $1million. During the 2025 and 2024 fiscal years, insurance and claims costs included $32,082,000 and $8,824,000 of net unfavorable adjustments to prior years claims estimates, respectively. Unfavorable development of prior years claims estimates of $32,082,000 during the 2025 fiscal year was primarily comprised of (i)approximately $10.7million of unfavorable development on commercial trucking claims up to $1million per occurrence for accident years 2024 and prior; (ii)approximately $10.6million of unfavorable development on commercial trucking claims in excess of $1million per occurrence for accident years 2024 and prior, including approximately $5.7million related to the Cabral Matter; (iii)approximately $8.4million of unfavorable development on cargo-related claims primarily attributable to fraud and theft in the supply chain; and (iv)approximately $2.4million of net unfavorable development relating to reinsurance arrangements involving the Companys captive insurance subsidiary, Signature Insurance Company, in connection with certain risks of the Companys BCO Independent Contractors. Selling, general and administrative costs increased $12,840,000 in fiscal year 2025 as compared to fiscal year 2024. The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased information technology project consulting fees, increased stock-based compensation expense, increased wages, increased legal fees, an increased provision for incentive compensation and increased employee benefit costs, primarily attributable to increased medical and pharmacy costs under the self-insured portion of the Companys medical plan, partially offset by the impact of Chief Executive Officer (CEO) transition costs in fiscal year 2024. Included in selling, general and administrative costs was stock-based compensation expense of $5,998,000 and $3,435,000 for the 2025 and 2024 fiscal years, respectively, and incentive compensation expense of $3,625,000 and $1,970,000 for the 2025 and 2024 fiscal years, respectively. Depreciation and amortization decreased $10,350,000 in fiscal year 2025 compared to fiscal year 2024. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software. Impairment of intangibles and other assets was $32,170,000 in fiscal year 2025. This was attributable to the impairment matters referenced above under Expenses Impairment of intangible and other assets. The year-over-prior-year change in interest and debt expense (income) was $6,415,000, with net interest and debt expense of $996,000 in fiscal year 2025 compared to net interest and debt income of $5,419,000 in fiscal year 2024. The increase in interest and debt expense (income) was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment and increased interest expense related to finance lease obligations. The effective income tax rate was 23.6% for fiscal year 2025 and 23.0% for fiscal year 2024.The effective income tax rate was higher than the statutory federal income tax rate of 21% for fiscal year 2025 primarily attributable to state taxes. The effective income tax rate was higher than the statutory federal income tax rate of 21% for fiscal year 2024 primarily attributable to state taxes, partially offset by federal research and development tax credits. Net income was $115,007,000, or $3.31 per basic and diluted share, in fiscal year 2025. Net income was $195,946,000, or $5.51 per basic and diluted share, in fiscal year 2024. Net income during fiscal year 2025 was unfavorably impacted by $32,170,000, or $0.71 per basic and diluted share, related to the impairment of intangible and other assets charges noted above. Fiscal Year Ended December28, 2024 Compared to Fiscal Year Ended December30, 2023 Revenue for fiscal year 2024 was $4,819,245,000, a decrease of $484,077,000, or 9%, compared to fiscal year 2023. Transportation revenue decreased $474,838,000, or 9%. The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 8% and decreased revenue per load of approximately 1% compared to fiscal year 2023. Reinsurance premiums were $63,237,000 and $72,476,000 for fiscal years 2024 and 2023, respectively. The decrease in revenue from reinsurance premiums was primarily attributable to a decrease in the average number of trucks provided by BCO Independent Contractors in fiscal year 2024 compared to fiscal year 2023. 38 [Table of Contents](#toc) Truck transportation revenue generated by third party truck capacity providers for fiscal year 2024 was $4,346,554,000, representing 90% of total revenue, a decrease of $482,976,000, or 10%, compared to fiscal year 2023. The number of loads hauled by third party truck capacity providers decreased approximately 8% in fiscal year 2024 compared to fiscal year 2023, and revenue per load on loads hauled by third party truck capacity providers decreased approximately 2% compared to fiscal year 2023. The decrease in the number of loads hauled via truck compared to fiscal year 2023 was primarily due to a broad-based decrease in demand for the Companys truck transportation services. Loads hauled via other truck transportation services decreased 20%, less-than-truckload loadings decreased 13%, loads hauled via van equipment decreased 7% and loads hauled via unsided/platform equipment decreased 6% as compared to fiscal year 2023. The decrease in revenue per load on loads hauled via truck was primarily due to a softer freight demand environment experienced during fiscal year 2024 and the impact of lower diesel fuel costs on loads hauled via Truck Brokerage Carriers. Revenue per load on loads hauled via other truck transportation services decreased 10%, on loads hauled via van equipment decreased 4% and on less-than-truckload loadings decreased 3%, while revenue per load on loads hauled via unsided/platform equipment increased 3% as compared to fiscal year 2023. The increase in revenue per load on loads hauled via unsided/platform equipment of 3% was favorably impacted by an increase in the percentage of revenue contributed by heavy/specialized equipment, which typically has a higher revenue per load. 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 $118,295,000 and $147,691,000 in fiscal years 2024 and 2023, respectively. It should be noted that billings to many customers of the Companys truck brokerage services include a single all-in rate and do 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 multimode capacity providers for fiscal year 2024 was $374,230,000, or 8% of total revenue, an increase of $9,295,000, or 3%, compared to fiscal year 2023. Revenue per load on revenue generated by multimode capacity providers increased approximately 3% in fiscal year 2024 compared to fiscal year 2023, while the number of loads hauled by multimode capacity providers was approximately the same in fiscal year 2024 compared to fiscal year 2023. Revenue per load on loads hauled via ocean increased 15%, while revenue per load on loads hauled via air and rail intermodal decreased 51% and 9%, respectively, during fiscal year 2024 as compared to fiscal year 2023. The increase in revenue per load on loads hauled by ocean was broad-based across many customers and reflected the impact of various geopolitical events on ocean shipping rates, generally. The decrease in revenue per load on loads hauled by air cargo carriers was primarily attributable to the impact of high value air loadings at one specific customer during fiscal year 2023. The decrease in revenue per load on loads hauled by rail intermodal was broad-based across many customers. 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. Purchased transportation was 77.7% and 76.7% of revenue in fiscal years 2024 and 2023, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to an increased rate of purchased transportation on revenue generated by Truck Brokerage Carriers. Commissions to agents were 8.1% and 8.7% of revenue in fiscal years 2024 and 2023, respectively. The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers during fiscal year 2024. Investment income was $14,810,000 and $10,141,000 in fiscal years 2024 and 2023, respectively. The increase in investment income was attributable to a higher average investment balance held by the insurance segment during fiscal year 2024 and higher average rates of return on investments in fiscal year 2024. Other operating costs increased $4,590,000 in fiscal year 2024 compared to fiscal year 2023. The increase in other operating costs compared to the prior year was primarily due to an increased provision for contractor bad debt and decreased gains on sales of operating property. 39 [Table of Contents](#toc) Insurance and claims decreased $312,000 in fiscal year 2024 compared to fiscal year 2023. The decrease in insurance and claims expense compared to the prior year was primarily due to decreased BCO miles traveled during fiscal year 2024, partially offset by increased net unfavorable development of prior years claims in fiscal year 2024. During the 2024 and 2023 fiscal years, insurance and claims costs included $8,824,000 and $6,058,000 of net unfavorable adjustments to prior years claims estimates, respectively. Selling, general and administrative costs increased $5,909,000 in fiscal year 2024 as compared to fiscal year 2023. The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased employee benefit costs, primarily attributable to increased medical and pharmacy costs under the self-insured portion of the Companys medical plan, the impact of Chief Executive Officer (CEO) transition costs and an increased provision for incentive compensation, partially offset by decreased project consulting fees. Included in selling, general and administrative costs was incentive compensation expense of $1,970,000 and $591,000 for the 2024 and 2023 fiscal years, respectively. Depreciation and amortization decreased $1,415,000 in fiscal year 2024 compared to fiscal year 2023. The decrease in depreciation and amortization expense was primarily due to decreased trailing equipment depreciation, partially offset by increased depreciation on new and updated digital tools deployed for use by the Companys network of agents, capacity providers and employees. Net interest and debt income increased $1,473,000 in fiscal year 2024 compared to fiscal year 2023. The increase in interest and debt income was primarily attributable to increased interest income earned on cash balances held by the transportation logistics segment, partially offset by increased interest expense related to finance lease obligations. The effective income tax rate was 23.0% for fiscal year 2024 and 24.0% for fiscal year 2023.The effective income tax rate was higher than the statutory federal income tax rate of 21% for fiscal year 2024 primarily attributable to state taxes, partially offset by federal research and development tax credits. The effective income tax rate was higher than the statutory federal income tax rate of 21% in fiscal year 2023 primarily attributable to state income taxes and nondeductible executive compensation, partially offset by excess tax benefits realized on stock-based awards. Net income was $195,946,000, or $5.51 per basic and diluted share, in fiscal year 2024. Net income was $264,394,000, or $7.36 per basic and diluted share, in fiscal year 2023. Capital Resources and Liquidity Working capital and the ratio of current assets to current liabilities were $520,486,000 and 1.7 to 1, respectively, at December27, 2025, compared with $646,713,000 and 2.0 to 1, respectively, at December28, 2024, and $677,517,000 and 2.0 to 1, respectively, at December30, 2023. 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 $224,882,000, $286,561,000, and $393,648,000 in fiscal years 2025, 2024 and 2023, respectively. The decrease in cash flow provided by operating activities for fiscal year 2025 was primarily attributable to the impact of decreased net income (excluding the non-cash impact on net income relating to the impairment of intangible and other assets) and the timing of collections of receivables, partially offset by the timing of payments of insurance claims. The decrease in cash flow provided by operating activities for fiscal year 2024 was primarily attributable to decreased net income and decreased favorable net working capital impacts in connection with decreased net receivables, defined as accounts receivable less accounts payable. The Company declared and paid $1.56 per share, or $54,126,000 in the aggregate, in cash dividends during fiscal year 2025, and during such period, also paid $70,632,000 of dividends payable which were declared during fiscal year 2024 and included in current liabilities in the consolidated balance sheet at December28, 2024. In addition, on December4, 2025, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share, or $68,117,000 in the aggregate, payable on January21, 2026 to stockholders of record of its Common Stock as of January6, 2026. Dividends payable of $68,117,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December27, 2025. The Company declared and paid $1.38 per share, or $49,043,000 in the aggregate, in cash dividends during fiscal year 2024, and during such period, also paid $71,433,000 of dividends payable which were declared during fiscal year 2023 and included in current liabilities in the consolidated balance sheet at December30, 2023. In addition, on December9, 2024, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share, or $70,632,000 in the aggregate, payable on January21, 2025 to stockholders of record of its Common Stock as of January7, 2025. Dividends payable of $70,632,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December28, 2024. The Company declared and paid $1.26 per share, or $45,276,000 in the aggregate, in cash dividends during fiscal year 2023, and during such period, also paid $71,854,000 of dividends payable which were declared during fiscal year 2022 and included in current liabilities in the consolidated balance sheet at December31, 2022. Since paying its first cash dividend in August 2005, the Company has paid approximately $1,087,000,000 in cash dividends in the aggregate to its stockholders, inclusive of the $2.00 per share special dividend paid on January21, 2026. 40 [Table of Contents](#toc) During fiscal year 2025, the Company purchased 1,281,863 shares of its Common Stock at a total cost of $180,901,000, including $179,139,000 in cash purchases and accrued excise tax of $1,762,000 which is included in other current liabilities in the consolidated balance sheet at December27, 2025. During fiscal year 2024, the Company purchased 452,019 shares of its Common Stock at a total cost of $82,117,000, including $81,400,000 in cash purchases and accrued excise tax of $717,000 which was included in other current liabilities in the consolidated balance sheet at December28, 2024 and paid during fiscal year 2025. During fiscal year 2023, the Company purchased 319,332 shares of its Common Stock at a total cost of $54,267,000, including $53,919,000 in cash purchases and excise tax of $348,000 which was included in other current liabilities in the consolidated balance sheet at December30, 2023 and paid during fiscal year 2024. The Company has used cash provided by operating activities to fund the purchases. Since January 1997, the Company has purchased approximately $2,515,000,000 of its Common Stock under programs authorized by the Board of Directors of the Company in open market and private block transactions. As of December27, 2025, the Company may purchase in the aggregate up to 1,266,118 shares of its Common Stock under its authorized stock purchase programs. Long-term debt, including current maturities, was $76,822,000 at December27, 2025, compared to $102,307,000 at December28, 2024 and $71,140,000 at December30, 2023. Shareholders equity was $795,665,000, or 91% of total capitalization (defined as long-term debt including current maturities plus equity), at December27, 2025, compared to $972,439,000, or 90% of total capitalization at December28, 2024 and $983,923,000, or 93% of total capitalization at December30, 2023. The decrease in shareholders equity was primarily the result of purchases of shares of the Companys Common Stock and dividends declared by the Company in fiscal year 2025, partially offset by net income. The decrease in shareholders equity in fiscal year 2024 was primarily the result of dividends declared by the Company and purchases of shares of the Companys Common Stock, partially offset by net income. On July1, 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 (as further amended as of June21, 2024, the Credit Agreement). The Credit Agreement, which matures July1, 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. 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 Companys 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 Companys 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 Companys 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 the Company to be materially restrictive to the Companys operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement. At December27, 2025, the Company had no borrowings outstanding and $34,916,000 of letters of credit outstanding under the Credit Agreement. At December27, 2025, there was $265,084,000 available for future borrowings under the Credit Agreement and access to an additional $300,000,000 under the Credit Agreements accordion feature. In addition, the Company has $75,331,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $83,701,000 at December27, 2025. Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities, commercial paper and U.S. Treasury obligations 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 Companys annual capital requirements for operating property are generally for trailing equipment and information 41 [Table of Contents](#toc) 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 Companys capital requirements. During fiscal years 2025, 2024 and 2023, the Company acquired $7,732,000, $62,194,000 and $4,093,000, respectively, of trailing equipment by entering into finance leases. During fiscal years 2025, 2024 and 2023, the Company also purchased $9,880,000, $30,998,000 and $25,688,000, respectively, of operating property. Landstar anticipates acquiring either by purchase or lease financing approximately $104,000,000 in new trailing equipment, primarily to replace older trailing equipment in fiscal year 2026. Landstar anticipates spending approximately $12,000,000 on information technology hardware and software in fiscal year 2026, $6,000,000 of which relates to either building or buying software applications that enhance or add to the Companys technology ecosystem. In addition, Landstar anticipates spending approximately $3,000,000 on buildings and improvements in fiscal year 2026. Management believes that cash flow from operations combined with the Companys borrowing capacity under the Credit Agreement will be adequate to meet Landstars debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase programs and meet working capital needs. Legal Proceedings As previously disclosed by the Company in its Quarterly Report on Form 10-Q for the 2025 second quarter filed with the SEC on July29, 2025, the Current Report on Form 8-K filed with the SEC on August13, 2025, the Quarterly Report on Form 10-Q for the 2025 third quarter filed with the SEC on October28, 2025 and the Current Report on Form 8-K filed with the SEC on January21, 2026, a trial verdict (the Verdict) was rendered on August6, 2025 in state court in El Paso County, Texas, in the matter of Eduardo Cabral, et. al. v. Landstar Ranger, Inc., et. al. (the Cabral Matter). As previously disclosed, the Verdict included a determination by the jury that Landstar Ranger, Inc. (Landstar Ranger) acted as a broker and not as a motor carrier with respect to the transportation of the shipment involved in a tragic accident. The Verdict also determined total monetary damages of $22.8million and that 15% of such damages, or $3.42million, was attributable to Landstar Ranger with the remainder of the total monetary damages attributable to the hauling motor carrier and the hauling motor carriers employee truck driver. On January13, 2026, the trial court entered a judgment (the Judgment) with respect to the Verdict that found Landstar Ranger financially responsible for 100%, rather than 15%, of the $22.8million of monetary damages awarded to the plaintiffs, plus pre-judgment interest. As a result of the Judgment, the Company recorded a pre-tax charge of approximately $5.7million during the 2025 fiscal fourth quarter to insurance and claim costs which is included in insurance claims in the Companys consolidated balance sheet as of December27, 2025. The Company intends to vigorously appeal the Cabral Matter, including the Judgment; however, no assurances can be provided as to the probability of success with respect to any potential appeals relating to the Cabral Matter, generally, or the Judgment, specifically, or the ultimate outcome of any such appeals. The total cost associated with this matter, which may include post-judgment interest, bonding-related costs and legal and other professional fees, will depend on many factors and the ultimate financial impact, as well as the timing of the ultimate resolution of this matter, are difficult to predict. 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 and reasonably estimable 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. Critical Accounting 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 the Company. 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 within its various programs. During fiscal years 2025, 2024 and 2023, insurance and claims costs included $32,082,000, $8,824,000 and $6,058,000 of net unfavorable adjustments to prior years claims estimates, respectively. The unfavorable development of prior years claims in the 2025 fiscal year was primarily due to several specific commercial trucking claims, including $5.7million related to the Judgment in the Cabral Matter, and elevated cargo loss experience as a result of fraud and theft in the supply chain. The unfavorable development of prior years claims in the 2024 and 2023 fiscal years was attributable in each year to several specific claims. It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at December27, 2025, primarily due to the inherent difficulty in estimating the severity of commercial trucking claims and the potential judgment or settlement amount that may be incurred in connection with the resolution of such claims. 42 [Table of Contents](#toc) Significant variances from the Companys estimates for the ultimate resolution of self-insured claims could be expected to positively or negatively affect Landstars 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. Item7A. 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 July1, 2022, Landstar entered into the Second Amended and Restated Credit Agreement (as further amended as of June21, 2024, the Credit Agreement) with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement, which matures July1, 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. The revolving credit loans under the Credit Agreement as of December27, 2025, 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 Companys 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 Companys Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. During all of fiscal years 2025 and 2024 and as of both December27, 2025 and December28, 2024, 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 $91,482,000, the balance at December27, 2025, 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 Companys operating results. Assets and liabilities of the Companys 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 when they occur. The assets held at the Companys Canadian and Mexican subsidiaries at December27, 2025 were collectively, as translated to U.S. dollars, less than 2% of total consolidated assets. Accordingly, translation gains or losses of 25% or less related to the Canadian and Mexican operations would not be material. 43 [Table of Contents](#toc) Item 8. Financial Statements and Supplementary Data LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) | | | | | Dec. 27, 2025 | | | Dec. 28, 2024 | | | | ASSETS | | | | Current Assets | | | | | Cash and cash equivalents | | $ | 396,694 | | | $ | 515,018 | | | | Short-term investments | | | 55,531 | | | | 51,619 | | | | Trade accounts receivable, less allowance of $12,490 and $12,904 | | | 670,137 | | | | 683,841 | | | | Other receivables, including advances to independent contractors, less allowance of $18,759 and $17,812 | | | 52,784 | | | | 47,160 | | | | Assets held for sale | | | 12,231 | | | | | | | | Other current assets | | | 28,949 | | | | 22,229 | | | | | | | | | | | | | | Total current assets | | | 1,216,326 | | | | 1,319,867 | | | | | | | | | | | | | | Operating property, less accumulated depreciation and amortization of $473,642 and $456,547 | | | 261,322 | | | | 311,345 | | | | Goodwill | | | 34,005 | | | | 40,933 | | | | Other assets | | | 124,282 | | | | 141,166 | | | | | | | | | | | | | | Total assets | | $ | 1,635,935 | | | $ | 1,813,311 | | | | | | | | | | | | | | LIABILITIES AND SHAREHOLDERS EQUITY | | | | Current Liabilities | | | | | Cash overdraft | | $ | 56,654 | | | $ | 61,033 | | | | Accounts payable | | | 369,567 | | | | 383,625 | | | | Current maturities of long-term debt | | | 28,342 | | | | 33,116 | | | | Insurance claims | | | 87,343 | | | | 40,511 | | | | Dividends payable | | | 68,117 | | | | 70,632 | | | | Liabilities held for sale | | | 6,961 | | | | | | | | Other current liabilities | | | 78,856 | | | | 84,237 | | | | | | | | | | | | | | Total current liabilities | | | 695,840 | | | | 673,154 | | | | | | | | | | | | | | Long-term debt, excluding current maturities | | | 48,480 | | | | 69,191 | | | | Insurance claims | | | 62,706 | | | | 62,842 | | | | Deferred income taxes and other noncurrent liabilities | | | 33,244 | | | | 35,685 | | | | Shareholders Equity | | | | | Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,590,708 and 68,559,269 shares | | | 686 | | | | 686 | | | | Additional paid-in capital | | | 261,256 | | | | 255,260 | | | | Retained earnings | | | 2,852,680 | | | | 2,859,916 | | | | Cost of 34,531,982 and 33,243,196 shares of common stock in treasury | | | (2,313,245 | ) | | | (2,131,413 | ) | | | Accumulated other comprehensive loss | | | (5,712 | ) | | | (12,010 | ) | | | | | | | | | | | | | Total shareholders equity | | | 795,665 | | | | 972,439 | | | | | | | | | | | | | | Total liabilities and shareholders equity | | $ | 1,635,935 | | | $ | 1,813,311 | | | | | | | | | | | | | See accompanying notes to consolidated financial statements. 44 [Table of Contents](#toc) LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) | | | | | Fiscal Years Ended | | | | | | December27, 2025 | | | December28, 2024 | | | December30, 2023 | | | | Revenue | | $ | 4,743,760 | | | $ | 4,819,245 | | | $ | 5,303,322 | | | | Investment income | | | 13,685 | | | | 14,810 | | | | 10,141 | | | | Costs and expenses: | | | | | | Purchased transportation | | | 3,688,343 | | | | 3,745,241 | | | | 4,068,262 | | | | Commissions to agents | | | 387,397 | | | | 392,751 | | | | 462,668 | | | | Other operating costs, net of gains on asset sales/dispositions | | | 61,586 | | | | 58,781 | | | | 54,191 | | | | Insurance and claims | | | 159,436 | | | | 113,929 | | | | 114,241 | | | | Selling, general and administrative | | | 230,548 | | | | 217,708 | | | | 211,799 | | | | Depreciation and amortization | | | 46,388 | | | | 56,738 | | | | 58,153 | | | | Impairment of intangible and other assets | | | 32,170 | | | | | | | | | | | | | | | | | | | | | | | | | | Total costs and expenses | | | 4,605,868 | | | | 4,585,148 | | | | 4,969,314 | | | | | | | | | | | | | | | | | | Operating income | | | 151,577 | | | | 248,907 | | | | 344,149 | | | | Interest and debt expense (income) | | | 996 | | | | (5,419 | ) | | | (3,946 | ) | | | | | | | | | | | | | | | | | Income before income taxes | | | 150,581 | | | | 254,326 | | | | 348,095 | | | | Income taxes | | | 35,574 | | | | 58,380 | | | | 83,701 | | | | | | | | | | | | | | | | | | Net income | | $ | 115,007 | | | $ | 195,946 | | | $ | 264,394 | | | | | | | | | | | | | | | | | | Basic and diluted earnings per share | | $ | 3.31 | | | $ | 5.51 | | | $ | 7.36 | | | | | | | | | | | | | | | | | | Average basic and diluted shares outstanding | | | 34,717,000 | | | | 35,538,000 | | | | 35,920,000 | | | | | | | | | | | | | | | | | | Dividends per common share | | $ | 3.56 | | | $ | 3.38 | | | $ | 3.26 | | | | | | | | | | | | | | | | | See accompanying notes to consolidated financial statements. 45 [Table of Contents](#toc) LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) | | | | | Fiscal Years Ended | | | | | | Dec. 27, 2025 | | | Dec. 28, 2024 | | | Dec. 30, 2023 | | | | Net income | | $ | 115,007 | | | $ | 195,946 | | | $ | 264,394 | | | | Other comprehensive income (loss): | | | | | | Unrealized holding gains on available-for-sale investments, net of tax expense of $660, $604 and $942 | | | 2,409 | | | | 2,205 | | | | 3,439 | | | | Foreign currency translation gains (losses) | | | 3,889 | | | | (7,350 | ) | | | 4,720 | | | | | | | | | | | | | | | | | | Other comprehensive income (loss) | | | 6,298 | | | | (5,145 | ) | | | 8,159 | | | | | | | | | | | | | | | | | | Comprehensive income | | $ | 121,305 | | | $ | 190,801 | | | $ | 272,553 | | | | | | | | | | | | | | | | | See accompanying notes to consolidated financial statements. 46 [Table of Contents](#toc) LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) | | | | | Fiscal Years Ended | | | | | | Dec. 27, 2025 | | | Dec. 28, 2024 | | | Dec. 30, 2023 | | | | OPERATING ACTIVITIES | | | | | | Net income | | $ | 115,007 | | | $ | 195,946 | | | $ | 264,394 | | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | Depreciation and amortization | | | 46,388 | | | | 56,738 | | | | 58,153 | | | | Non-cash interest charges | | | 264 | | | | 263 | | | | 263 | | | | Provisions for losses on trade and other accounts receivable | | | 16,574 | | | | 18,266 | | | | 14,032 | | | | Gains on sales/disposals of operating property | | | (1,807 | ) | | | (1,597 | ) | | | (4,574 | ) | | | Impairment of intangible and other assets | | | 32,170 | | | | | | | | | | | | Deferred income taxes, net | | | 2,647 | | | | (6,990 | ) | | | (7,709 | ) | | | Stock-based compensation | | | 5,998 | | | | 3,435 | | | | 4,282 | | | | Changes in operating assets and liabilities: | | | | | | (Increase) decrease in trade and other accounts receivable | | | (8,494 | ) | | | 37,834 | | | | 222,895 | | | | Increase in other assets | | | (11,290 | ) | | | (16,094 | ) | | | (2,544 | ) | | | Decrease in accounts payable | | | (14,058 | ) | | | (12,355 | ) | | | (131,392 | ) | | | (Decrease) increase in other liabilities | | | (5,213 | ) | | | 8,509 | | | | (15,795 | ) | | | Increase (decrease) in insurance claims | | | 46,696 | | | | 2,606 | | | | (8,357 | ) | | | | | | | | | | | | | | | | | NET CASH PROVIDED BY OPERATING ACTIVITIES | | | 224,882 | | | | 286,561 | | | | 393,648 | | | | | | | | | | | | | | | | | | INVESTING ACTIVITIES | | | | | | Sales and maturities of investments | | | 163,229 | | | | 112,065 | | | | 112,555 | | | | Purchases of investments | | | (162,630 | ) | | | (101,312 | ) | | | (101,639 | ) | | | Purchases of operating property | | | (9,880 | ) | | | (30,998 | ) | | | (25,688 | ) | | | Proceeds from sales of operating property | | | 6,925 | | | | 9,746 | | | | 8,294 | | | | | | | | | | | | | | | | | | NET CASH USED BY INVESTING ACTIVITIES | | | (2,356 | ) | | | (10,499 | ) | | | (6,478 | ) | | | | | | | | | | | | | | | | | FINANCING ACTIVITIES | | | | | | Decrease in cash overdraft | | | (4,379 | ) | | | (508 | ) | | | (31,412 | ) | | | Dividends paid | | | (124,758 | ) | | | (120,476 | ) | | | (117,130 | ) | | | Proceeds from exercises of stock options | | | | | | | | | | | 28 | | | | Taxes paid in lieu of shares issued related to stock-based compensation plans | | | (933 | ) | | | (3,928 | ) | | | (9,185 | ) | | | Purchases of common stock | | | (179,856 | ) | | | (81,400 | ) | | | (53,919 | ) | | | Principal payments on finance lease obligations | | | (33,217 | ) | | | (31,027 | ) | | | (36,353 | ) | | | | | | | | | | | | | | | | | NET CASH USED BY FINANCING ACTIVITIES | | | (343,143 | ) | | | (237,339 | ) | | | (247,971 | ) | | | | | | | | | | | | | | | | | Effect of exchange rate changes on cash and cash equivalents | | | 2,472 | | | | (4,748 | ) | | | 2,263 | | | | | | | | | | | | | | | | | | (Decrease) increase in cash and cash equivalents, including cash and cash equivalents classified as assets held for sale | | | (118,145 | ) | | | 33,975 | | | | 141,462 | | | | Less: Net change in cash and cash equivalents classified as assets held for sale | | | (179 | ) | | | | | | | | | | | | | | | | | | | | | | | | | Net change in cash and cash equivalents | | | (118,324 | ) | | | 33,975 | | | | 141,462 | | | | Cash and cash equivalents at beginning of period | | | 515,018 | | | | 481,043 | | | | 339,581 | | | | | | | | | | | | | | | | | | Cash and cash equivalents at end of period | | $ | 396,694 | | | $ | 515,018 | | | $ | 481,043 | | | | | | | | | | | | | | | | | See accompanying notes to consolidated financial statements. 47 [Table of Contents](#toc) LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY For the Fiscal Years Ended December27, 2025, December28, 2024 and December30, 2023 (In thousands, except share and per share amounts) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | | | | | Additional | | | | | | | | | | | | Other | | | | | | | | | Common Stock | | | Paid-In | | | Retained | | | Treasury Stock at Cost | | | Comprehensive | | | | | | | | | Shares | | | Amount | | | Capital | | | Earnings | | | Shares | | | Amount | | | (Loss)Income | | | Total | | | | Balance December31, 2022 | | | 68,382,310 | | | $ | 684 | | | $ | 258,487 | | | $ | 2,635,960 | | | | 32,455,300 | | | $ | (1,992,886 | ) | | $ | (15,024 | ) | | $ | 887,221 | | | | Net income | | | | | | 264,394 | | | | | | | 264,394 | | | | Dividends ($3.26 per share) | | | | | | (116,709 | ) | | | | | | (116,709 | ) | | | Purchases of common stock | | | | | | | 319,332 | | | | (54,267 | ) | | | | (54,267 | ) | | | Issuance of stock related to stock-based compensation plans | | | 115,014 | | | | 1 | | | | (8,127 | ) | | | | 6,019 | | | | (1,031 | ) | | | | (9,157 | ) | | | Stock-based compensation | | | | | 4,282 | | | | | | | | 4,282 | | | | Other comprehensive income | | | | | | | | | 8,159 | | | | 8,159 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance December30, 2023 | | | 68,497,324 | | | $ | 685 | | | $ | 254,642 | | | $ | 2,783,645 | | | | 32,780,651 | | | $ | (2,048,184 | ) | | $ | (6,865 | ) | | $ | 983,923 | | | | Net income | | | | | | 195,946 | | | | | | | 195,946 | | | | Dividends ($3.38 per share) | | | | | | (119,675 | ) | | | | | | (119,675 | ) | | | Purchases of common stock | | | | | | | 452,019 | | | | (82,117 | ) | | | | (82,117 | ) | | | Issuance of stock related to stock-based compensation plans | | | 61,945 | | | | 1 | | | | (2,817 | ) | | | | 10,526 | | | | (1,112 | ) | | | | (3,928 | ) | | | Stock-based compensation | | | | | 3,435 | | | | | | | | 3,435 | | | | Other comprehensive loss | | | | | | | | | (5,145 | ) | | | (5,145 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance December28, 2024 | | | 68,559,269 | | | $ | 686 | | | $ | 255,260 | | | $ | 2,859,916 | | | | 33,243,196 | | | $ | (2,131,413 | ) | | $ | (12,010 | ) | | $ | 972,439 | | | | Net income | | | | | | 115,007 | | | | | | | 115,007 | | | | Dividends ($3.56 per share) | | | | | | (122,243 | ) | | | | | | (122,243 | ) | | | Purchases of common stock | | | | | | | 1,281,863 | | | | (180,901 | ) | | | | (180,901 | ) | | | Issuance of stock related to stock-based compensation plans | | | 31,439 | | | | | (2 | ) | | | | 6,923 | | | | (931 | ) | | | | (933 | ) | | | Stock-based compensation | | | | | 5,998 | | | | | | | | 5,998 | | | | Other comprehensive income | | | | | | | | | 6,298 | | | | 6,298 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance December27, 2025 | | | 68,590,708 | | | $ | 686 | | | $ | 261,256 | | | $ | 2,852,680 | | | | 34,531,982 | | | $ | (2,313,245 | ) | | $ | (5,712 | ) | | $ | 795,665 | | | See accompanying notes to consolidated financial statements. 48 [Table of Contents](#toc) LANDSTAR SYSTEM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Significant Accounting Policies Consolidation The consolidated financial statements include the accounts of Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc. (LSHI). Landstar System, Inc. and its subsidiary are herein referred to as Landstar or the Company. Significant intercompany accounts have been eliminated in consolidation. Estimates The preparation of the consolidated financial statements requires the use of managements estimates. Actual results could differ from those estimates. Fiscal Year Landstars fiscal year is the 52 or 53 week period ending the last Saturday in December. Revenue Recognition The nature of the Companys freight transportation services and its performance obligations to customers, regardless of the mode of transportation used to perform such services, relate to the safe and on-time pick-up and delivery of a customers freight on a shipment-by-shipment basis. Landstar customers are typically invoiced on a shipment-by-shipment basis at a pre-defined rate, payable thirty to sixty (30-60) days after the customers receipt of such invoice. Payment terms to customers do not contain a significant financing component and the amount owed by the customer does not contain variable terms, embedded or otherwise. We have determined that revenue recognition over the freight transit period provides a faithful depiction of the transfer of services to the customer as our obligation for which we are primarily responsible for fulfilling is performed over the transit period. Accordingly, transportation revenue billed to a customer for the physical transportation of freight and related direct freight expenses are recognized on a gross basis over the freight transit period as the performance obligation to the customer is satisfied. The Company determines the transit period for a given shipment based upon the pick-up date and the delivery date, which may be estimated if delivery has not occurred as of the reporting date. Determining the transit period and how much of it has been completed as of a given reporting date may therefore require management to make judgments that affect the timing of revenue recognized. With respect to shipments with a pick-up date in one reporting period and a delivery date in another, the Company recognizes such transportation revenue based on relative transit time in each reporting period. A days in transit output method is used to measure the progress of the performance of the Companys freight transportation services as of the reporting date and a portion of the total revenue that will be billed to the customer once a load is delivered is recognized in each reporting period based on the percentage of total transit time that has been completed at the end of the applicable reporting period. Reinsurance premiums of the insurance segment are recognized over the period earned, which is usually on a m onthl y basis. Fuel surcharges billed to customers for freight hauled by independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the BCO Independent Contractors) are excluded from revenue and paid in entirety to the BCO Independent Contractors. 49 [Table of Contents](#toc) 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 fiscal years ended December27, 2025, December28, 2024 and December30, 2023 (dollars in thousands): | | | | | | | | | | | | | | | | | | Fiscal Years Ended | | | | Mode | | December27,2025 | | | December28,2024 | | | December30,2023 | | | | Truck BCO Independent Contractors | | | 38 | % | | | 38 | % | | | 38 | % | | | Truck Truck Brokerage Carriers | | | 53 | % | | | 52 | % | | | 53 | % | | | Rail intermodal | | | 2 | % | | | 2 | % | | | 2 | % | | | Ocean and air cargo carriers | | | 5 | % | | | 6 | % | | | 5 | % | | | Truck Equipment Type | | | | | | Van equipment | | $ | 2,328,386 | | | $ | 2,447,810 | | | $ | 2,742,281 | | | | Unsided/platform equipment | | $ | 1,527,802 | | | $ | 1,455,663 | | | $ | 1,490,393 | | | | Less-than-truckload | | $ | 95,856 | | | $ | 99,828 | | | $ | 117,683 | | | | Other truck transportation (1) | | $ | 383,970 | | | $ | 343,253 | | | $ | 479,173 | | | | (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. | | Insurance Claim Costs Landstar provides, primarily on an actuarially determined basis, for the estimated costs of cargo, property, casualty, general liability and workers compensation claims both reported and for claims incurred but not reported. Landstar retains liability through a self-insured retention for commercial trucking claims up to $5million per occurrence. The Company also maintains third party insurance arrangements providing coverage for commercial trucking liabilities in excess of $5 million. Historically, these third party insurance arrangements were based on policy year periods beginning on May1 and ending on the subsequent April 30. Beginning with the policy year period commencing May1, 2025, the Company and its third party insurance providers adjusted the applicable policy year period, beginning in 2026, to commence on June1 and end on the subsequent May 31. All applicable third party insurance arrangements with a policy period ending April30, 2026, have been amended to provide for a policy period ending May31, 2026, as reflected below. Effective May1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5million and $10million (the 2023 Initial Excess Policy) with a third party insurance company. For commercial trucking claims incurred on or after May1, 2023 through May31, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18million over the thirty-seven month term ending May31, 2026. After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5million, with an aggregate limit of $15million for the thirty-seven month term ending May31, 2026. The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10million. These third party arrangements provide coverage on a per occurrence or aggregated basis. The Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentia ls bet ween proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage. 50 [Table of Contents](#toc) Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers compensation claim and $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Companys 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. Tires Tires purchased as part of trailing equipment are capitalized as part of the cost of the e quipm ent. Replacement tires are charged to expense when placed in service. Cash and Cash Equivalents Included in cash and cash equivalents are all investments, except those provided for collateral, with an original maturity of 3 months or less. Financial Instruments The Companys financial instruments include cash equivalents, short and long-term investments, trade and other accounts receivable, accounts payable, other accrued liabilities, and long-term debt plus current maturities (Debt). The carrying value of cash equivalents, trade and other accounts receivable, accounts payable, current insurance claims and other accrued liabilities approximates fair value as the assets and liabilities are short term in nature. Short and long-term investments are carried at fair value as further described in Note 3 in the Companys consolidated financial statements. The Companys Debt includes borrowings under the Companys revolving credit facility, to the extent there are any, plus borrowings relating to finance lease obligations used to finance trailing equipment. The interest rates on borrowings under the revolving credit facility are typically tied to short-term interest rates that adjust monthly 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. Trade and Other Receivables The allowance for doubtful accounts for both trade and other receivables represents managements estimate of the amount of outstanding receivables that will not be collected. Estimates are used to determine the allowance for doubtful accounts for both trade and other receivables and are generally based on specific identification, historical collection results, current economic trends and changes in payment trends. Following is a summary of the activity in the allowance for doubtful accounts for fiscal years ending December27, 2025, December28, 2024 and December30, 2023 (in thousands): | | | | | | | | | | | | | | | | | | | | | | Balance atBeginningofPeriod | | | ChargedtoCosts andExpenses | | | Write-offs,Net ofRecoveries | | | BalanceatEnd ofPeriod | | | | For the Fiscal Year Ended December27, 2025 | | | | | | | Trade receivables | | $ | 12,904 | | | $ | 5,835 | | | $ | (6,249 | ) | | $ | 12,490 | | | | Other receivables | | | 19,276 | | | | 10,738 | | | | (5,402 | ) | | | 24,612 | | | | Other non-current receivables | | | 208 | | | | 1 | | | | | | | | 209 | | | | | | | | | | | | | | | | | | | | | | | $ | 32,388 | | | $ | 16,574 | | | $ | (11,651 | ) | | $ | 37,311 | | | | | | | | | | | | | | | | | | | | | | For the Fiscal Year Ended December28, 2024 | | | | | | | Trade receivables | | $ | 11,738 | | | $ | 6,449 | | | $ | (5,283 | ) | | $ | 12,904 | | | | Other receivables | | | 15,376 | | | | 11,811 | | | | (7,911 | ) | | | 19,276 | | | | Other non-current receivables | | | 206 | | | | 6 | | | | (4 | ) | | | 208 | | | | | | | | | | | | | | | | | | | | | | | $ | 27,320 | | | $ | 18,266 | | | $ | (13,198 | ) | | $ | 32,388 | | | | | | | | | | | | | | | | | | | | | | For the Fiscal Year Ended December30, 2023 | | | | | | | Trade receivables | | $ | 12,121 | | | $ | 5,704 | | | $ | (6,087 | ) | | $ | 11,738 | | | | Other receivables | | | 11,745 | | | | 8,325 | | | | (4,694 | ) | | | 15,376 | | | | Other non-current receivables | | | 203 | | | | 3 | | | | | | | | 206 | | | | | | | | | | | | | | | | | | | | | | | $ | 24,069 | | | $ | 14,032 | | | $ | (10,781 | ) | | $ | 27,320 | | | | | | | | | | | | | | | | | | | | | 51 [Table of Contents](#toc) Other Receivables and Other Assets The Company provides financing to certain independent commission sales agents. Generally, these notes receivable include personal guarantees, may be collateralized by the assets and equity of the borrower and are due in periodic installments, including principal and interest payments, for terms of one to seven years. Notes receivable are recorded at amortized cost, net of the allowance for doubtful accounts. At December27, 2025 and December28, 2024, the Company had $30,761,000 and $26,606,000, respectively, of gross notes receivable from independent commission sales agents. The current portion is included within other receivables and the long-term portion is included in other assets in the consolidated balance sheets. Operating Property Operating property is recorded at cost. Depreciation is provided on a straight-line basis over the estimated useful lives of the related assets. Buildings and improvements are being depreciated over 30 years. Trailing equipment is being depreciated over 7 to 10 years. Information technology hardware and software is generally being depreciated over 3 to 7 years. The Company evaluates its operating property whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with ASC 360, Property, Plant and Equipment . When such events or changes in circumstances occur, a recoverability test is performed based on projected undiscounted cash flows expected to be realized from the use and eventual disposition of the asset or asset group. An impairment is recorded for any excess of the carrying amount over the estimated fair value. Fair value is determined based on quoted market values, discounted cash flows or external appraisals, as appropriate. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets of acquired businesses. The Company has two reporting units within the transportation logistics segment that report goodwill. The Company reviews its goodwill balance annually for impairment for each reporting unit, unless circumstances dictate more frequent assessments, and in accordance with ASU 2011-08, Testing Goodwill for Impairment . ASU 2011-08 permits an initial assessment, commonly referred to as step zero, of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and also provides a basis for determining whether it is necessary to perform the quantitative analysis required by ASC Topic 350. As further discussed in Note 14, during the third fiscal quarter of 2025, in connection with the decision to actively market Landstar Metro (as defined below), management identified a triggering event to perform a quantitative goodwill impairment test. As part of its analysis, the Company used a combination of the discounted cash flow method and the market approach. Based on the quantitative assessment, the Company concluded that Landstar Metros goodwill was impaired and recorded a non-cash impairment charge of $ 7,530,000 to goodwill within the transportation logistics segment. In the fourth fiscal quarter of 2025, the Company performed its annual qualitative assessment of remaining goodwill and determined it was more likely than not that the fair value of each of its reporting units would be greater than its carrying amount. Therefore, the Company determined it was not necessary to perform the quantitative goodwill impairment test. During fiscal year 2025, the change in the carrying amount of goodwill was primarily due to the $ 7,530,000 impairment , with the remaining change due to net foreign currency translation. Income Taxes Income tax expense is equal to the current years liability for income taxes and a provision for deferred income taxes. Deferred tax assets and liabilities are recorded for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. Share-Based Payments The Companys share-based payment arrangements include restricted stock units (RSU), non-vested restricted stock, Deferred Stock Units and stock options. The fair value of an RSU with a performance condition is determined based on the market value of the Companys Common Stock on the date of grant, discounted for lack of marketability for a minimum post-vesting holding requirement. With respect to RSU awards with a performance condition, the Company reports compensation expense ratably over the life of the 52 [Table of Contents](#toc) award based on an estimated number of units that will vest over the life of the award, multiplied by the fair value of an RSU.The fair value of an RSU with a market condition is determined at the time of grant based on the expected achievement of the market condition at the end of each vesting period. With respect to RSU awards with a market condition, the Company recognizes compensation expense ratably over the requisite service period under an award based on the fair market value of the award at the time of grant, regardless of whet her the market condition is satisfied. Previously recognized compensation cost would be reversed, however, if the employee terminated employment prior to completing such requisite service period. The Company estimates the fair value of stock option awards on the date of grant using the Black-Scholes pricing model and recognizes compensation cost for stock option awards expected to vest on a straight-line basis over the requisite service period for the entire award. Forfeitures are estimated at grant date based on historical experience and anticipated employee turnover. The fair values of each share of non-vested restricted stock issued and Deferred Stock Unit granted are based on the fair value of a share of the Companys Common Stock on the date of grant and compensation costs for non-vested restricted stock and Deferred Stock Units are recognized on a straight-line basis over the requisite service period for the award. Earnings Per Share Basic earnings per common share are based on the weighted average number of common shares outstanding, which includes outstanding non-vested restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares outstanding plus the dilutive effect of outstanding stock awards, if applicable. Outstanding RSUs were excluded from the calculation of diluted earnings per share for all fiscal years because the performance metric requirements or market condition for vesting had not been satisfied. During and as of the fiscal years ended December27, 2025 and December28, 2024, there werenooutstanding stock options issued by the Company. During the fiscal year ended December30, 2023, the impact on earnings per share of future compensation expense related to outstanding, unvested time-based awards was greater than the incremental impact of outstanding dilutive stock options, and would therefore have an anti-dilutive effect on earnings per share if included in the calculation of earnings per share. Accordingly, the Company had no reconciling items between the average number of common shares outstanding used to calculate basic earnings per common share and the average number of common shares and common share equivalents outstanding used to calculate diluted earnings per share during the fiscal years ended December27, 2025, December28, 2024 and December30, 2023. Dividends Payable On December 4, 2025, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share payable on January 21, 2026 to stockholders of record of its Common Stock as of January 6, 2026. Dividends payable of $68,117,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December27, 2025. On December 9, 2024, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share payable on January 21, 2025 to stockholders of record of its Common Stock as of January 7, 2025. Dividends payable of $70,632,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December28, 2024. Foreign Currency Translation Assets and liabilities of the Companys 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 when they occur. 53 [Table of Contents](#toc) (2) 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 fiscal years ended December27, 2025, December28, 2024 and December30, 2023 (in thousands): | | | | | Unrealized Holding Gains (Losses) on Available-for-Sale Securities | | | ForeignCurrency Translation | | | Total | | | | Balance as of December31, 2022 | | $ | (8,449 | ) | | $ | (6,575 | ) | | $ | (15,024 | ) | | | Other comprehensive income | | | 3,439 | | | | 4,720 | | | | 8,159 | | | | | | | | | | | | | | | | | | Balance as of December30, 2023 | | | (5,010 | ) | | | (1,855 | ) | | | (6,865 | ) | | | Other comprehensive income (loss) | | | 2,205 | | | | (7,350 | ) | | | (5,145 | ) | | | | | | | | | | | | | | | | | Balance as of December28, 2024 | | | (2,805 | ) | | | (9,205 | ) | | | (12,010 | ) | | | Other comprehensive income | | | 2,409 | | | | 3,889 | | | | 6,298 | | | | | | | | | | | | | | | | | | Balance as of December27, 2025 | | $ | (396 | ) | | $ | (5,316 | ) | | $ | (5,712 | ) | | | | | | | | | | | | | | | | 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 fiscal years ended December27, 2025, December28, 2024 and December30, 2023. (3) Investments Investments include primarily investment-grade corporate bonds, asset-backed securities, commercial paper and U.S. Treasury obligations 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 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 Level1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level2. As Level2 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 Level1 inputs related to U.S. Treasury obligations and money market investments and Level2 inputs related to investment-grade corporate bonds, asset-backed securities, commercial paper and direct obligations of government agencies. Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $504,000 and $3,573,000 at December27, 2025 and December28, 2024, respectively. 54 [Table of Contents](#toc) The amortized cost and fair values of available-for-sale investments are as follows at December27, 2025 and December28, 2024 (in thousands): | | | | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | | December27, 2025 | | | | | | | Money market investments | | $ | 15,046 | | | $ | | | | $ | | | | $ | 15,046 | | | | Asset-backed securities | | | 19,380 | | | | 43 | | | | 1,128 | | | | 18,295 | | | | Corporate bonds, commercial paper and direct obligations of government agencies | | | 103,425 | | | | 1,097 | | | | 523 | | | | 103,999 | | | | U.S. Treasury obligations | | | 9,666 | | | | 7 | | | | | | | | 9,673 | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 147,517 | | | $ | 1,147 | | | $ | 1,651 | | | $ | 147,013 | | | | | | | | | | | | | | | | | | | | | | December28, 2024 | | | | | | | Money market investments | | $ | 13,473 | | | $ | | | | $ | | | | $ | 13,473 | | | | Asset-backed securities | | | 26,785 | | | | 25 | | | | 1,770 | | | | 25,040 | | | | Corporate bonds, commercial paper and direct obligations of government agencies | | | 107,180 | | | | 198 | | | | 2,026 | | | | 105,352 | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 147,438 | | | $ | 223 | | | $ | 3,796 | | | $ | 143,865 | | | | | | | | | | | | | | | | | | | | | For those available-for-sale investments with unrealized losses at December27, 2025 and December28, 2024, 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 | | | | December27, 2025 | | | | | | | | | Asset-backed securities | | $ | 2,768 | | | $ | 386 | | | $ | 10,425 | | | $ | 742 | | | $ | 13,193 | | | $ | 1,128 | | | | Corporate bonds, commercial paper, and direct obligations of government agencies | | | 16,772 | | | | 56 | | | | 13,818 | | | | 467 | | | | 30,590 | | | | 523 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 19,540 | | | $ | 442 | | | $ | 24,243 | | | $ | 1,209 | | | $ | 43,783 | | | $ | 1,651 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December28, 2024 | | | | | | | | | Asset-backed securities | | $ | 9,663 | | | $ | 37 | | | $ | 12,596 | | | $ | 1,733 | | | $ | 22,259 | | | $ | 1,770 | | | | Corporate bonds, commercial paper, and direct obligations of government agencies | | | 18,409 | | | | 169 | | | | 59,609 | | | | 1,857 | | | | 78,018 | | | | 2,026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 28,072 | | | $ | 206 | | | $ | 72,205 | | | $ | 3,590 | | | $ | 100,277 | | | $ | 3,796 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 Companys consolidated statements of income. Short-term investments include $55,531,000 in current maturities of investments held by the Companys insurance segment at December27, 2025. The non-current portion of the bond portfolio of $91,482,000 is included in other assets. The short-term investments, together with $28,170,000 of non-current investments, provide collateral for the $75,331,000 of letters of credit issued to guarantee payment of insurance claims. 55 [Table of Contents](#toc) Investment income represents the earnings on the insurance segments assets. Investment income earned from the assets of the in sur ance segment are included as a component of operating income as the investment of these assets is critical to providing collateral, liquidity and earnings with respect to the operation of the Companys insurance programs. (4) Income Taxes The provisions for income taxes consisted of the following (in thousands): | | | | | | | | | | | | | | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | Current: | | | | | | Federal | | $ | 28,799 | | | $ | 54,621 | | | $ | 76,827 | | | | State | | | 3,099 | | | | 9,750 | | | | 13,305 | | | | Foreign | | | 1,029 | | | | 999 | | | | 1,278 | | | | | | | | | | | | | | | | | | Total current | | $ | 32,927 | | | $ | 65,370 | | | $ | 91,410 | | | | | | | | | | | | | | | | | | Deferred: | | | | | | Federal | | $ | 2,272 | | | $ | (5,441 | ) | | $ | (8,410 | ) | | | State | | | 375 | | | | (1,549 | ) | | | 701 | | | | | | | | | | | | | | | | | | Total deferred | | $ | 2,647 | | | $ | (6,990 | ) | | $ | (7,709 | ) | | | | | | | | | | | | | | | | | Total: | | | | | | Federal | | $ | 31,071 | | | $ | 49,180 | | | $ | 68,417 | | | | State | | | 3,474 | | | | 8,201 | | | | 14,006 | | | | Foreign | | | 1,029 | | | | 999 | | | | 1,278 | | | | | | | | | | | | | | | | | | Total income taxes | | $ | 35,574 | | | $ | 58,380 | | | $ | 83,701 | | | | | | | | | | | | | | | | | The provision for income taxes was based on income before income taxes which consisted of the following (in thousands): | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | United States | | $ | 148,000 | | | $ | 250,586 | | | $ | 345,146 | | | | Foreign | | | 2,581 | | | | 3,740 | | | | 2,949 | | | | | | | | | | | | | | | | | | Income before income taxes | | $ | 150,581 | | | $ | 254,326 | | | $ | 348,095 | | | | | | | | | | | | | | | | | Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities consisted of the following (in thousands): | | | | | Dec.27,2025 | | | Dec.28,2024 | | | | Deferred tax assets: | | | | | Receivable valuations | | $ | 9,356 | | | $ | 7,899 | | | | Share-based payments | | | 1,212 | | | | 1,139 | | | | Self-insured claims | | | 8,006 | | | | 4,659 | | | | Other | | | 14,445 | | | | 11,411 | | | | | | | | | | | | | | Total deferred tax assets | | $ | 33,019 | | | $ | 25,108 | | | | | | | | | | | | | | Deferred tax liabilities: | | | | | Operating property | | $ | 44,263 | | | $ | 35,131 | | | | Goodwill | | | 4,942 | | | | 4,366 | | | | Other | | | 4,723 | | | | 3,213 | | | | | | | | | | | | | | Total deferred tax liabilities | | $ | 53,928 | | | $ | 42,710 | | | | | | | | | | | | | | Net deferred tax liability | | $ | 20,909 | | | $ | 17,602 | | | | | | | | | | | | | 56 [Table of Contents](#toc) The following table summarizes the differences between income taxes calculated at the federal income tax rate of 21% on income before income taxes and the provisions for income taxes (in thousands): | | | | | Fiscal Year 2025 | | | Fiscal Year 2024 | | | Fiscal Year 2023 | | | | | | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | | | | U.S federal statutory income tax rate | | $ | 31,622 | | | | 21.0 | % | | $ | 53,409 | | | | 21.0 | % | | $ | 73,100 | | | | 21.0 | % | | | State and local income taxes, net of federal income tax effect(1) | | | 4,128 | | | | 2.7 | % | | | 5,596 | | | | 2.2 | % | | | 9,703 | | | | 2.8 | % | | | Foreign tax effects | | | 487 | | | | 0.3 | % | | | 214 | | | | 0.1 | % | | | 659 | | | | 0.2 | % | | | Effect of cross-border tax laws | | | (50 | ) | | | 0.0 | % | | | (59 | ) | | | 0.0 | % | | | (69 | ) | | | 0.0 | % | | | Tax credits | | | (749 | ) | | | (0.5 | %) | | | (2,591 | ) | | | (1.0 | %) | | | (1,672 | ) | | | (0.5 | %) | | | Non-taxable and non-deductible items | | | 1,468 | | | | 1.0 | % | | | 913 | | | | 0.3 | % | | | 518 | | | | 0.1 | % | | | Changes in unrecognized tax benefits | | | (1,443 | ) | | | (1.0 | )% | | | 929 | | | | 0.4 | % | | | 1,421 | | | | 0.4 | % | | | Other adjustments, net | | | 111 | | | | 0.1 | % | | | (31 | ) | | | 0.0 | % | | | 41 | | | | 0.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Effective tax rate | | $ | 35,574 | | | | 23.6 | % | | $ | 58,380 | | | | 23.0 | % | | $ | 83,701 | | | | 24.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1) | State taxes in Florida, Illinois, California and Texas make up the majority (greater than 50 percent) of the tax effect in this category. | | The Company files a consolidated U.S.federal income tax return. The Company or its subsidiaries file state tax returns in the majority of the U.S.state tax jurisdictions. With few exceptions, the Company and its subsidiaries are no longer subject to U.S.federal or state income tax examinations by tax authorities for 2021 and prior years. The Companys wholly-owned Canadian subsidiary, Landstar Canada, Inc., is subject to Canadian income and other taxes. The Companys wholly-owned Mexican subsidiaries, Landstar Holdings, S. de R.L.C.V. and Landstar Metro, S.A.P.I. de C.V., are subject to Mexican income and other taxes. The Companys Canadian and Mexican subsidiaries also may each be subject to U.S. income and other taxes. As of December27, 2025 and December28, 2024, the Company had $3,953,000 and $5,396,000, respectively, of net unrecognized tax benefits representing the provision for the uncertainty of certain tax positions plus a component of interest and penalties. Estimated interest and penalties on the provision for the uncertainty of certain tax positions is included in income tax expense. At December27, 2025 and December28, 2024, there was $1,345,000 and $1,793,000, respectively, accrued for estimated interest and penalties related to the uncertainty of certain tax positions. The Company does not currently anticipate any significant increase or decrease to the unrecognized tax benefit during fiscal year 2026. The following table summarizes the rollforward of the total amounts of gross unrecognized tax benefits for fiscal years 2025 and 2024 (in thousands): | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | | Gross unrecognized tax benefits beginning of the year | | $ | 6,571 | | | $ | 5,454 | | | | Gross increases related to current year tax positions | | | 430 | | | | 598 | | | | Gross increases related to prior year tax positions | | | 444 | | | | 1,344 | | | | Lapse of statute of limitations | | | (2,625 | ) | | | (825 | ) | | | | | | | | | | | | | Gross unrecognized tax benefits end of the year | | $ | 4,820 | | | $ | 6,571 | | | | | | | | | | | | | Landstar paid income taxes of $51,451,000 in fiscal year 2025, $47,528,000 in fiscal year 2024 and $92,695,000 in fiscal year 2023, which consisted of the following (in thousands): | | | | | | | | | | | | | | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | Federal | | $ | 44,000 | | | $ | 41,000 | | | $ | 76,000 | | | | State | | | 5,807 | | | | 6,137 | | | | 14,928 | | | | Foreign | | | 1,644 | | | | 391 | | | | 1,767 | | | | | | | | | | | | | | | | | | Total income taxes paid, net of refunds | | $ | 51,451 | | | $ | 47,528 | | | $ | 92,695 | | | | | | | | | | | | | | | | | 57 [Table of Contents](#toc) (5) Operating Property Operating property is summarized as follows (in thousands): | | | | | Dec.27,2025 | | | Dec.28,2024 | | | | Land | | $ | 17,389 | | | $ | 17,389 | | | | Buildings and improvements | | | 81,045 | | | | 80,719 | | | | Trailing equipment | | | 485,769 | | | | 518,524 | | | | Information technology hardware and software | | | 142,064 | | | | 141,029 | | | | Other equipment | | | 8,697 | | | | 10,231 | | | | | | | | | | | | | | Total operating property, gross | | | 734,964 | | | | 767,892 | | | | Less accumulated depreciation and amortization | | | 473,642 | | | | 456,547 | | | | | | | | | | | | | | Total operating property, net | | $ | 261,322 | | | $ | 311,345 | | | | | | | | | | | | | Included above is $152,921,000 in fiscal year 2025 and $175,464,000 in fiscal year 2024 of operating property under finance leases, $108,385,000 and $131,770,000, respectively, net of accumulated depreciation and amortization. Landstar acquired operating property by entering into finance leases in the amount of $7,732,000 in fiscal year 2025, $62,194,000 in fiscal year 2024 and $4,093,000 in fiscal year 2023. (6) Retirement Plan Landstar sponsors an Internal Revenue Code section 401(k) defined contri buti on plan for the benefit of U.S. domiciled full-time employees who have completed three months of service. Eligible employees make voluntary contributions up to 75% of their base salary, subject to certain limitations. Landstar contributes an amount equal to 100% of the first 3% and 50% of the next 2% of such contributions, subject to certain limitations. The expense for the Company-sponsored defined contribution plan included in selling, general and administrative expense was $2,868,000 in fiscal year 2025, $2,805,000 in fiscal year 2024 and $2,812,000 in fiscal year 2023. (7) Debt Other than the finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of December27, 2025 and December28, 2024. On July 1, 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 (as further amended as of June21, 2024, the Credit Agreement). The Credit Agreement, which matures July1, 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 December27, 2025, 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement. 58 [Table of Contents](#toc) 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. Landstar paid interest of $5,326,000 in fiscal year 2025, $3,813,000 in fiscal year 2024 and $3,604,000 in fiscal year 2023. (8) Leases Landstars 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 Landstars operating lease right-of-use assets and operating lease liabilities represent leases for facilities maintained in support of the Companys network of BCO Independent Contractors and office space used to conduct Landstars 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 Landstars operating leases include one or more options to renew. The exercise of lease renewal options is typically at Landstars 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 Landstars operating leases do not provide an implicit rate, Landstar utilized its incremental borrowing rate based on the infor matio n 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 t he incremental borrowing rate. The components of lease cost for finance leases and operating leases for the fiscal year ended December27, 2025 were (in thousands): | | | Finance leases: | | | | Amortization of right-of-use assets | | $ | 18,276 | | | | Interest on lease liability | | | 4,305 | | | | | | | | | | Total finance lease cost | | | 22,581 | | | | Operating leases: | | | | Lease cost | | | 5,079 | | | | Variable lease cost | | | | | | | Sublease income | | | (6,219 | ) | | | | | | | | | Total net operating lease income | | | (1,140 | ) | | | | | | | | | Total net lease cost | | $ | 21,441 | | | | | | | | | Total net operating lease income, net of rent expense under operating leases, was $1,769,000 and $1,853,000 in fiscal years 2024 and 2023, respectively. 59 [Table of Contents](#toc) A summary of the lease classification on the Companys consolidated balance sheet as of December27, 2025 is as follows (in thousands): Assets: | | | | | | | | | | | | Operating lease right-of-use assets | | Other assets | | $ | 615 | | | | Finance lease assets | | Operating property, less accumulated depreciation and amortization | | | 108,385 | | | | | | | | | | | Total lease assets | | | $ | 109,000 | | | | | | | | | | 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 December27, 2025 (in thousands): | | | | | Finance Leases | | | Operating Leases | | | | 2026 | | $ | 31,764 | | | $ | 298 | | | | 2027 | | | 20,966 | | | | 264 | | | | 2028 | | | 17,057 | | | | 94 | | | | 2029 | | | 12,678 | | | | | | | | 2030 | | | 1,759 | | | | | | | | Thereafter | | | | | | | | | | | | | | | | | | | | | Total future minimum lease payments | | | 84,224 | | | | 656 | | | | Less amount representing interest (1.6% to 6.4%) | | | 7,402 | | | | 41 | | | | | | | | | | | | | | Present value of minimum lease payments | | $ | 76,822 | | | $ | 615 | | | | | | | | | | | | | | Current maturities of long-term debt | | | 28,342 | | | | | Long-term debt, excluding current maturities | | | 48,480 | | | | | Other current liabilities | | | | 289 | | | | Deferred income taxes and other noncurrent liabilities | | | | 326 | | | The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of December27, 2025 we re: | | | | | | | | | | | | | | FinanceLeases | | | OperatingLeases | | | | Weighted average remaining lease term (years) | | | 3.3 | | | | 2.3 | | | | Weighted average discount rate | | | 5.2 | % | | | 5.5 | % | | (9) Share-Based Payment Arrangements As of December27, 2025, 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). 6,000,000 shares of the Companys Common Stock were authorized for issuance under the 2011 EIP and 200,000 shares of the Companys Common Stock were authorized for issuance under the 2022 DSCP. The 2011 EIP 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): | | | | | | | | | | | | | | | | | | Fiscal Years | | | | | | 2025 | | | 2024 | | | 2023 | | | | Total cost of the Plans during the period | | $ | 5,998 | | | $ | 3,435 | | | $ | 4,282 | | | | Amount of related income tax benefit recognized during the period | | | (1,364 | ) | | | (1,963 | ) | | | (3,622 | ) | | | | | | | | | | | | | | | | | Net cost of the Plans during the period | | $ | 4,634 | | | $ | 1,472 | | | $ | 660 | | | | | | | | | | | | | | | | | Included in income tax benefits recognized in the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 were tax deficiencies (excess tax benefits) from stock-based awards of $106,000, ( $1,122,000 ) and ( $2,830,000 ) , respectively. 60 [Table of Contents](#toc) As of December27, 2025, there were 172,859 shares of the Companys Common Stock reserved for issuance under the 2022 DSCP and 2,681,782 shares of the Companys Common Stock reserved for issuance under the 2011 EIP. Restricted Stock Units The following table summarizes information regarding the Companys outstanding restricted stock unit (RSU) awards with either a performance condition or a market condition under the Plans: | | | | | | | | | | | | | | NumberofRSUs | | | WeightedAverageGrant DateFair Value | | | | Outstanding at December31, 2022 | | | 151,780 | | | $ | 115.80 | | | | Granted | | | 41,638 | | | $ | 164.91 | | | | Shares earned in excess of target (1) | | | 79,176 | | | $ | 98.39 | | | | Vested shares, including shares earned in excess of target | | | (137,861 | ) | | $ | 97.97 | | | | Forfeited | | | (2,011 | ) | | $ | 142.67 | | | | | | | | | | | Outstanding at December30, 2023 | | | 132,722 | | | $ | 138.93 | | | | Granted | | | 102,997 | | | $ | 138.85 | | | | Shares earned in excess of target (2) | | | 1,791 | | | $ | 51.42 | | | | Vested shares, including shares earned in excess of target | | | (45,057 | ) | | $ | 115.69 | | | | Forfeited | | | (29,801 | ) | | $ | 140.20 | | | | | | | | | | | Outstanding at December28, 2024 | | | 162,652 | | | $ | 144.12 | | | | Granted | | | 54,402 | | | $ | 147.09 | | | | Forfeited | | | (13,342 | ) | | $ | 158.95 | | | | | | | | | | | Outstanding at December27, 2025 | | | 203,712 | | | $ | 143.95 | | | | | | | | | | | (1) | Represents additional shares earned (i)under the February1, 2019 and January31, 2020 RSU awards as fiscal year 2022 financial results exceeded target performance level and (ii)under the April24, 2018 and July1, 2019 RSU awards as total shareholder return during the applicable performance period exceeded target performance level under each of those awards. | | | (2) | Represents additional shares earned under the April24, 2018 and July1, 2019 RSU awards as total shareholder return during the applicable performance period exceeded target performance level under each of those awards. | | During fiscal years 2025, 2024 and 2023, the Company granted RSUs with a performance condition. During fiscal years 2025 and 2024, the Company also granted RSUs with a market condition. RSUs with a performance condition granted on January31, 2025 and February3, 2025 may vest on January31 of 2028, 2029 and 2030 based on growth in operating income and pre-tax income per diluted share from continuing operations as compared to the results from the 2024 fiscal year. RSUs with a performance condition granted on February2, 2024 may vest on January31 of 2027, 2028 and 2029 based on growth in operating income and pre-tax income per diluted share from continuing operations as compared to the results from the 2023 fiscal year. RSUs with a performance condition granted on February3, 2023 may vest on January31 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. At the time of grant, the target number of common shares available for issuance under the January31, 2025, February2, 2024 and February3, 2023 grants equals 100 % of the number of RSUs granted, and the maximum number of common shares available for issuance under the January31, 2025, February2, 2024 and February3, 2023 grants equals 200 % of the number of RSUs credited to the recipient. In the event actual results exceed the target, the number of shares that will be granted will exceed the number of RSUs granted. The fair value of an RSU with a performance condition was determined based on the market value of the Companys Common Stock on the date of grant, discounted for lack of marketability for a minimum post-vesting holding requirement. The discount rate due to lack of marketability used for RSU award grants with a performance condition for all periods was 7 %. With respect to RSU awards with a performance condition, the Company reports compensation expense over the life of the award based on an estimated number of units that will vest over the life of the award, multiplied by the fair value of an RSU at the time of grant. On January31, 2025 and February2, 2024, the Company granted 6,050 and 58,268 RSUs, respectively, that vest based on a market condition. These RSUs may vest based on the achievement of the target Companys total shareholder return (TSR) compound annual growth rate, adjusted to reflect dividends (if any) paid during the periods and capital adjustments as may be necessary, and are eligible to vest annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date. The fair value of these RSU awards was determined at the time of grants based on the expected achievement of the market condition. With respect to these RSU awards, the Company reports compensation expense ratably over the service period of the awards based on the number of units granted multiplied by the grant date fair value of the RSU. Previously recognized compensation cost would be reversed only if the employee did not complete the requisite service period due to termination of employment. 61 [Table of Contents](#toc) The Company recognized approximately $ 1,102,000 , ($ 800,000 ) and $ 581,000 of share-based compensation expense (benefit) related to RSU awards in fiscal years 2025, 2024 and 2023, respectively.As of December27, 2025, there was a maximum of $ 51.2 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 2.8 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 2011 EIP provides the Compensation Committee of the Board of Directors with the authority to issue shares of Common Stock of the Company, subject to certain vesting and other restrictions on transfer (restricted stock). The following table summarizes information regarding the Companys outstanding shares of non-vested restricted stock and Deferred Stock Units (defined below) under the Plans: | | | | | | | | | | | | | | Number ofSharesandDeferredStock Units | | | WeightedAverageGrant DateFair Value | | | | Non-vested at December31, 2022 | | | 47,795 | | | $ | 138.30 | | | | Granted | | | 22,714 | | | $ | 179.32 | | | | Vested | | | (24,161 | ) | | $ | 138.35 | | | | | | | | | | | Non-vested at December30, 2023 | | | 46,348 | | | $ | 158.38 | | | | Granted | | | 31,525 | | | $ | 187.08 | | | | Vested | | | (25,647 | ) | | $ | 151.16 | | | | Forfeited | | | (4,707 | ) | | $ | 169.92 | | | | | | | | | | | Non-vested at December28, 2024 | | | 47,519 | | | $ | 180.17 | | | | Granted | | | 31,439 | | | $ | 158.29 | | | | Vested | | | (23,950 | ) | | $ | 176.95 | | | | Forfeited | | | (1,232 | ) | | $ | 174.25 | | | | | | | | | | | Non-vested at December27, 2025 | | | 53,776 | | | $ | 168.95 | | | 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 Companys 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 grant or the third, fourth and fifth anniversary of the date of the grant, in two equal annual installments on the first and second 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 Companys 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 Companys 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 December27, 2025, there was $4,549,000 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 1.6 years. Stock Options The Company did not grant any stock options during its 2023, 2024 or 2025 fiscal years. Options outstanding under the Plans generally become exercisable in either five equal annual installments commencing on the first anniversary of the date of grant or 100% on the fifth anniversary from the date of grant, subject to acceleration in certain circumstances. All options granted under the Plans expire on the tenth anniversary of the date of grant. Under the Plans, the exercise price of each option equals the fair market value of the Companys Common Stock on the date of grant. 62 [Table of Contents](#toc) The fair value of each option grant on its grant date was calculated using the Black-Scholes option pricing model. The Company utilized historical data, including exercise patterns and employee departure behavior, in estimating the term that options will be outstanding. Expected volatility was based on historical volatility and other factors, such as expected changes in volatility arising from planned changes to the Companys business, if any. The risk-free interest rate was based on the yield of zero coupon U.S. Treasury bonds for terms that approximated the terms of the options granted. The Company had no issued and outstanding vested or unvested stock options or unrecognized compensation costs related to non-vested stock options granted under the Plans as of or for the fiscal years ended December27, 2025 and December28, 2024. The following table summarizes information regarding the Companys outstanding stock options under the Plans for fiscal year 2023: | | | | | | | | | | | | | | | | | | | | | | OptionsOutstanding | | | Options Exercisable | | | | | | NumberofOptions | | | WeightedAverageExercise Priceper Share | | | NumberofOptions | | | WeightedAverageExercise Priceper Share | | | | Options at December31, 2022 | | | 1,900 | | | $ | 56.40 | | | | 1,900 | | | $ | 56.40 | | | | Exercised | | | (1,900 | ) | | $ | 56.40 | | | | | | | | | | | | | | | Options at December30, 2023 | | | | | | | | | | | | | | | | | | | | | The totalintrinsic value of stock options exercised during fiscal year 2023 was $218,000. Directors Stock Compensation Plan Directors of the Company who are not employees of the Company (each an Eligible Director) are entitled under the 2022 DSCP to receive a grant of such number of restricted shares of the Companys Common Stock or Deferred Stock Units equal to the quotient of $150,000 divided by the fair market value of a share of Common Stock on the date immediately following the date of each annual meeting of the stockholders of the Company (an Annual Meeting). In fiscal year 2025, 8,591 restricted shares were granted to Eligible Directors. In fiscal year 2024, 5,810 restricted shares were granted to Eligible Directors. In fiscal year 2023, 5,957 restricted shares were granted to Eligible Directors. No Deferred Stock Units were issued in fiscal years 2025, 2024 or 2023. Restricted shares granted in 2025, 2024 and 2023 vest on the date of the next Annual Meeting. During fiscal years 2025, 2024 and 2023, $1,062,000, $1,053,000 and $1,050,000, respectively, of compensation cost was recorded for the grant of these restricted shares. (10) Equity On December7, 2021, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,912,824 shares of the Companys Common Stock from time to time in the open market and in privately negotiated transactions. This program was completed during fiscal year 2025. On December6, 2022, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,900,826 additional shares of the Companys Common Stock from time to time in the open market and in privately negotiated transactions. On December4, 2023, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 319,332 additional shares of its Common Stock from time to time in the open market and in privately negotiated transactions under its share purchase program. As of December27, 2025, the Company had authorization to purchase in the aggregate up to 1,266,118 shares of its Common Stock under these programs. No specific expiration date has been assigned to the December6, 2022 or December4, 2023 authorizations. During fiscal year 2025, Landstar purchased a total of 1,281,863 shares of its Common Stock at a total cost of $180,901,000 pursuant to its previously announced stock purchase program, including $179,139,000 in cash purchases and accrued excise tax of $1,762,000, which is included in other current liabilities in the consolidated balance sheet at December27, 2025. The Company also paid $717,000 in excise tax on its common stock purchases, which was included in other current liabilities in the consolidated balance sheet at December28, 2024. The Company has 2,000,000 shares of preferred stock authorized and unissued. 63 Table of Contents (11) Commitments and Contingencies At December27, 2025, in addition to the $75,331,000 letters of credit secured by investments, Landstar had $34,916,000 of letters of credit outstanding under the Companys Credit Agreement. As previously disclosed by the Company in its Quarterly Report on Form 10-Q for the 2025 second quarter filed with the SEC on July29, 2025, the Current Report on Form 8-K filed with the SEC on August13, 2025, the Quarterly Report on Form 10-Q for the 2025 third quarter filed with the SEC on October28, 2025, and the Current Report on Form 8-K filed with the SEC on January21, 2026, a trial verdict (the Verdict) was rendered on August6, 2025 in state court in El Paso County, Texas, in the matter of Eduardo Cabral, et. al. v. Landstar Ranger, Inc., et. al. (the Cabral Matter). As previously disclosed, the Verdict included a determination by the jury that Landstar Ranger, Inc. (Landstar Ranger) acted as a broker and not as a motor carrier with respect to the transportation of the shipment involved in a tragic accident. The Verdict also determined total monetary damages of $22.8million and that 15% of such damages, or $3.42million, was attributable to Landstar Ranger, with the remainder of the total monetary damages attributable to the hauling motor carrier and the hauling motor carriers employee truck driver. On January13, 2026, the trial court entered a judgment (the Judgment) with respect to the Verdict that found Landstar Ranger financially responsible for 100%, rather than 15%, of the $22.8million of monetary damages awarded to the plaintiffs, plus pre-judgment interest. As a result of the Judgment, the Company recorded a pre-tax charge of approximately $5.7million during the 2025 fiscal fourth quarter to insurance and claim costs. As also previously disclosed, during fiscal year 2025, the company received cash payments of $12,000,000 from third party reinsurance providers in the form of a no claims bonus due to favorable loss experience with respect to claims incurred during the applicable policy period. In connection with the Judgment, the Company has reclassified this no claims bonus from current liabilities to current insurance claims in the consolidated balance sheet as of December27, 2025. The Company intends to vigorously appeal the Cabral Matter, including the Judgment; however, no assurances can be provided as to the probability of success with respect to any potential appeals relating to the Cabral Matter, generally, or the Judgment, specifically, or the ultimate outcome of any such appeals. The total cost associated with the Cabral Matter, which may include post-judgment interest, bonding-related costs and legal and other professional fees, will depend on many factors and the ultimate financial impact, as well as the timing of the ultimate resolution of this matter, are difficult to predict. The Company is involved in certain other 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 and reasonably estimable 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) Segment Information Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers freight. Landstars independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstars capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Companys third party capacity providers consist of 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 Landstars ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.7billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment. The transportation logistics segment provides a wide range of integrated transportation management solutions. 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, hazardous materials (haz-mat), cold chain/temperature-controlled, 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, military equipment and general commodities. 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. The results of operations from Landstar Blue and Landstar Metro are presented as part of the Companys transportation logistics segment. 64 Table of Contents 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 Landstars operating subsidiaries. In addition, it reinsures certain risks of the Companys BCO Independent Contractors and provides certain property and casualty insurance and reinsurance directly to certain of Landstars 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. Internal revenue for premiums billed by the insurance segment to the transportation logistics segment is calculated each fiscal period based primarily on an actuarial calculation of historical loss experience and is believed to approximate the cost that would have been incurred by the transportation logistics segment had similar insurance been obtained from an unrelated third party. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Companys chief operating decision maker (CODM) is our Chief Executive Officer. The CODM evaluates each segments performance and makes decisions about resource allocations primarily based on operating income, which is the principal financial metric utilized to monitor budgeted versus actual results by segment of the Company. Asset information by segment is not regularly provided to the CODM for purposes of evaluating performance or allocating resources, and therefore such information has not been presented. No single customer accounted for more than 10% of the Companys consolidated revenue in fiscal years 2025, 2024 and 2023. Substantially all of the Companys revenue is generated in North America, primarily through customers located in the United States. 65 Table of Contents The following tables summarize information about the Companys reportable business segments as of and for the fiscal years ending December27, 2025, December28, 2024 and December30, 2023 (in thousands): | | | | | | | | | | | | | | | | | | Transportation | | | | | | | | | | | | Logistics | | | Insurance | | | Total | | | | 2025 | | | | | | External revenue | | $ | 4,685,115 | | | $ | 58,645 | | | $ | 4,743,760 | | | | Internal revenue | | | | | | | 57,694 | | | | 57,694 | | | | | | | | | | | | | | | | | | Total revenue | | | 4,685,115 | | | | 116,339 | | | | 4,801,454 | | | | | | | | | | | | Investment income | | | | 13,685 | | | | 13,685 | | | | Purchased transportation | | | 3,688,343 | | | | | 3,688,343 | | | | Commissions to agents | | | 387,397 | | | | | 387,397 | | | | Other operating costs, net of gains on asset sales/dispositions | | | 61,586 | | | | | 61,586 | | | | Insurance and claims | | | 102,336 | | | | 114,794 | | | | 217,130 | | | | Selling, general and administrative | | | 219,006 | | | | 11,542 | | | | 230,548 | | | | Depreciation and amortization | | | 46,388 | | | | | 46,388 | | | | Impairment of intangible and other assets(1) | | | 32,170 | | | | | 32,170 | | | | | | | | | | | | | | | | | | Operating income | | | 147,889 | | | | 3,688 | | | | 151,577 | | | | | | | | | | | | Goodwill | | | 34,005 | | | | | 34,005 | | | | | | | | | | | | | | | | | | | | | Transportation | | | | | | | | | | | | Logistics | | | Insurance | | | Total | | | | 2024 | | | | | | External revenue | | $ | 4,756,008 | | | $ | 63,237 | | | $ | 4,819,245 | | | | Internal revenue | | | | | | | 57,476 | | | | 57,476 | | | | | | | | | | | | | | | | | | Total revenue | | | 4,756,008 | | | | 120,713 | | | | 4,876,721 | | | | | | | | | | | | Investment income | | | | 14,810 | | | | 14,810 | | | | Purchased transportation | | | 3,745,241 | | | | | 3,745,241 | | | | Commissions to agents | | | 392,751 | | | | | 392,751 | | | | Other operating costs, net of gains on asset sales/dispositions | | | 58,781 | | | | | 58,781 | | | | Insurance and claims | | | 92,712 | | | | 78,693 | | | | 171,405 | | | | Selling, general and administrative | | | 204,089 | | | | 13,619 | | | | 217,708 | | | | Depreciation and amortization | | | 56,738 | | | | | 56,738 | | | | | | | | | | | | | | | | | | Operating income | | | 205,696 | | | | 43,211 | | | | 248,907 | | | | | | | | | | | | Goodwill | | | 40,933 | | | | | 40,933 | | | | | | | | | | | | | | | | | | | | | Transportation | | | | | | | | | | | | Logistics | | | Insurance | | | Total | | | | 2023 | | | | | | External revenue | | $ | 5,230,846 | | | $ | 72,476 | | | $ | 5,303,322 | | | | Internal revenue | | | | | | | 67,977 | | | | 67,977 | | | | | | | | | | | | | | | | | | Total revenue | | | 5,230,846 | | | | 140,453 | | | | 5,371,299 | | | | | | | | | | | | Investment income | | | | 10,141 | | | | 10,141 | | | | Purchased transportation | | | 4,068,262 | | | | | 4,068,262 | | | | Commissions to agents | | | 462,668 | | | | | 462,668 | | | | Other operating costs, net of gains on asset sales/dispositions | | | 54,191 | | | | | 54,191 | | | | Insurance and claims | | | 101,179 | | | | 81,039 | | | | 182,218 | | | | Selling, general and administrative | | | 197,819 | | | | 13,980 | | | | 211,799 | | | | Depreciation and amortization | | | 58,153 | | | | | 58,153 | | | | | | | | | | | | | | | | | | Operating income | | | 288,574 | | | | 55,575 | | | | 344,149 | | | | | | | | | | | | Goodwill | | | 42,275 | | | | | 42,275 | | | | (1) | Included in the $32,170,000 impairment of intangible and other assets was a goodwill impairment of $7,530,000 within the transportation logistics segment. | | 66 [Table of Contents](#toc) | | | | | Fiscal Years Ended | | | | | | December27, 2025 | | | December28, 2024 | | | December30, 2023 | | | | Total revenue | | $ | 4,801,454 | | | $ | 4,876,721 | | | $ | 5,371,299 | | | | Elimination of internal revenue | | | (57,694 | ) | | | (57,476 | ) | | | (67,977 | ) | | | | | | | | | | | | | | | | | Total consolidated revenue | | | 4,743,760 | | | | 4,819,245 | | | | 5,303,322 | | | | Operating income | | $ | 151,577 | | | $ | 248,907 | | | $ | 344,149 | | | | Interest and debt expense (income)(2) | | | 996 | | | | (5,419 | ) | | | (3,946 | ) | | | | | | | | | | | | | | | | | Income before income taxes | | | 150,581 | | | | 254,326 | | | | 348,095 | | | | (2) | Interest and debt expense (income) includes (1)interest income earned on cash balances held by the transportation logistics segment of $4,590, $9,495 and $7,811 in 2025, 2024 and 2023, respectively and (2)consolidated total interest expense of $5,586, $4,076 and $3,865 in 2025, 2024 and 2023, respectively. | | (13) Change in Accounting Estimate for Self-Insured Claims 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 within its various programs. The following table summarizes the adverse effect of the increase in the cost of insurance claims resulting from net unfavorable development of prior year self-insured claims estimates on operating income, net income and basic and diluted earnings per share set forth in the consolidated statements of income for the fiscal years ended December27, 2025, December28, 2024 and December30, 2023 (in thousands, except per share amounts): | | | | | Fiscal Years Ended | | | | | | December27, 2025 | | | December28, 2024 | | | December30, 2023 | | | | Operating income | | $ | 32,082 | | | $ | 8,824 | | | $ | 6,058 | | | | Net income | | $ | 24,511 | | | $ | 6,794 | | | $ | 4,598 | | | | Basic and diluted earnings per share | | $ | 0.71 | | | $ | 0.19 | | | $ | 0.13 | | | The unfavorable development of prior years claims during the fiscal year ended December27, 2025 was primarily attributable to several specific commercial trucking claims, including approximately $5.7million related to the Judgment in the Cabral Matter, and elevated cargo loss experience as a result of fraud and theft in the supply chain. The unfavorable development of prior years claims in the fiscal years ended December28, 2024 and December30, 2023 was primarily attributable in each year to several specific claims. (14) Held for Sale Subsidiary During the 2025 fiscal year, the Company entered into an arrangement with a financial advisor to actively market its Mexican subsidiary, Landstar Metro, S.A.P.I. de C.V. (Landstar Metro) and to consider other strategic alternatives for this subsidiary, which may involve a sale or other disposition in whole or in part of Landstar Metro during the Companys 2026 fiscal year. The Company determined that this planned divestiture does not represent a strategic shift that would be expected to have a significant effect on our consolidated results of operations, and therefore the results of Landstar Metro are not reported as discontinued operations. It is not anticipated that a sale or other disposition of Landstar Metro will adversely affect the Companys ability to provide U.S.-Mexico cross-border services, given that Landstar Metro is principally engaged in intra-Mexico truck transportation services. In connection with the decision to actively market Landstar Metro, management identified a triggering event to perform a quantitative goodwill impairment test. Based on the quantitative assessment, the Company concluded that Landstar Metros goodwill was impaired and recorded a non-cash impairment charge of $7,530,000 to goodwill within the transportation logistics segment. Further, based on the expected fair value ofLandstar Metro, net of costs to sell, the Company recognized an impairment on assets held for sale of $10,678,000. Both impairments are included in impairment of intangible and other assets within the Companys consolidated statements of income. No assurances can be provided that there will not be additional charges and expenses incurred by the Company in connection with this sale process or upon any ultimate disposition of Landstar Metro. 67 [Table of Contents](#toc) As of December27, 2025, the assets and liabilities of Landstar Metro are presented as held for sale at carrying value. A summary of assets and liabilities associated with Landstar Metro that are held for sale, is presented below (in thousands): | | | | | | | | | | AsofDecember27,2025 | | | | Assets held for sale: | | | | Cash and cash equivalents | | $ | 179 | | | | Trade and other receivables | | | 8,712 | | | | Operating property | | | 7,981 | | | | Other assets | | | 6,037 | | | | Less: valuation allowance | | | (10,678 | ) | | | | | | | | | Total assets held for sale(1) | | $ | 12,231 | | | | | | | | | | Liabilities held for sale: | | | | Accounts payable | | $ | 2,640 | | | | Deferred income taxes and other liabilities | | | 4,321 | | | | | | | | | | Total liabilities held for sale(1) | | $ | 6,961 | | | | | | | | | | Cumulative translation loss of foreign entities held for sale (2) | | $ | 1,205 | | | | | | | | | | (1) | Assets and liabilities held for sale are separately presented on the consolidated balance sheets. | | | (2) | Cumulative translation loss of foreign entities held for sale is included within accumulated other comprehensive loss on the consolidated balance sheets. | | (15) Impairment of Software Assets During the 2025 fiscal year, the Company performed a strategic review of its operations. In connection with this strategic review, management evaluated its transportation management systems (TMSs), including the Landstar TMS, a cloud-based platform for truckload freight agent workflow, and the Blue TMS, a cloud-based platform built specifically to service the truckload brokerage contract services market. Management determined that the Landstar TMS, rather than the Blue TMS, would be the Companys primary TMS used in the future to service the truckload brokerage contract services market. As a result of this decision, the Company also determined to wind-down the Blue TMS and, in connection therewith, the Company performed a recoverability test with respect to potential impairment of the software assets associated with the Blue TMS and determined estimated fair value based on discounted cash flows. The Company subsequently recorded an $ 8,963,000 impairment charge within its transportation logistics segment, which is included in impairment of intangible and other assets within the Companys consolidated statements of income. (16) Impairment of Equity Investment In 2022, the Company acquired a minority equity investment in Cavnue, LLC (Cavnue), a privately held start-up 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 is considered an investment in non-marketable equity securities without a readily determinable market value. The carrying value of the non-marketable equity securities is adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). During the 2025 fiscal year, the Company determined that there were indicators of potential impairment related to the value of its equity investment in Cavnue related to the financial performance of the company and its ability to raise additional capital to finance continued investment in its operations. As such, the Company recorded a impairment charge for the carrying value of its investment in Cavnue of $ 4,999,000 during the fiscal year ended December27, 2025, which is included in impairment of intangible and other assets within the Companys consolidated statements of income. The Company subsequently fully divested itself of its interests in Cavnue in January 2026. 68 [Table of Contents](#toc) (17) Recent Accounting Pronouncements Adoption of New Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which expands disclosures in an entitys income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for annual periods beginning after December15, 2024. The Company adopted ASU 2023-09 on December27, 2025 retrospectively to all prior periods presented in the consolidated financial statements. Accounting Standards Issued But Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which expands disclosures about certain categories of expenses. ASU 2024-03 is effective for annual periods beginning after December15, 2026. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and disclosures. (18) Supply Chain Fraud Matter During the last week of the Companys 2025 first fiscal quarter, the Company identified a supply chain fraud (the Supply Chain Fraud Matter) relating to the Companys international freight forwarding operations. The Supply Chain Fraud Matter did not involve the Companys core North American truckload services. In connection with the Supply Chain Fraud Matter, consolidated revenue and purchased transportation as reported in the Companys fiscal year 2024, 2023 and 2022 financial results were each overstated by approximately 2%, 1%, and less than 0.5%, respectively. As the overstated amount of revenue was approximately equal to the overstated amount of purchased transportation, the impact on each of operating income and net income, as reported, was less than 1% in fiscal year 2024 and less than 0.2% in fiscal years 2023 and 2022, respectively. The Company performed a quantitative and qualitative analysis of the impact of the Supply Chain Fraud Matter in respect of the 2025 first fiscal quarter and the financial statements for each prior fiscal year period during which identified instances of fraud relating to this matter occurred. In connection therewith, the Company concluded that such impact was immaterial with respect to each such fiscal period. The Companys financial results for the fiscal year ended December27, 2025 included a $4.8million pre-tax expense, or $0.10 per basic and diluted share, relating to the Supply Chain Fraud Matter. This expense reflects the total currently anticipated aggregate adverse financial impact to Landstar relating to the Supply Chain Fraud Matter, net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries in the future. This expense was reflected in the fiscal year 2025 provision for contractor bad debt expense within other operating costs on the Companys consolidated statements of income. As of the December27, 2025 consolidated balance sheet, this amount was included in the allowance for doubtful accounts related to other receivables. 69 [Table of Contents](#toc) Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Landstar System, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Landstar System, Inc.and subsidiary (the Company) as of December27,2025 and December28, 2024, the related consolidated statements of income, comprehensive income, changes in shareholders equity, and cash flows for each of the fiscal years in the three-year period ended December27, 2025, and the related notes (collectively, the consolidated financial statements).In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December27,2025 and December28, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December27, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Companys internal control over financial reporting as of December27,2025, based oncriteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23 , 2026 expressed an unqualified opinion on the effectiveness of the Companys internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1)relates to accounts or disclosures that are material to the consolidated financial statements and (2)involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Self-insurance claims liability As discussed in Note 1 to the consolidated financial statements, the liability for insurance claims includes the actuarially determined estimated costs of cargo, property, casualty, general liability, and workers compensation claims, both reported and for claims incurred but not reported, up to the Companys retained amount per claim, which is referred to as the self-insurance claims liability. The Companys estimated costs of insurance claims include assumptions regarding the frequency and severity of claims and are based upon the facts and circumstances known as of the applicable balance sheet date. The Companys liability for insurance claims as of December27, 2025 was $150,049,000, which includes the self-insurance claims liability. 70 [Table of Contents](#toc) We identified the evaluation of the self-insurance claims liability as a critical audit matter. Specialized skills were needed to evaluate the Companys estimate of the self-insurance claims liability. This evaluation included assumptions related to the potential for the development in future periods of claims both reported and incurred but not reported as of the balance sheet date and the impact of those developments on the estimated liability associated with such claims. In addition, a higher degree of subjective auditor judgment was required to evaluate the Companys estimate of the self-insurance claims liability due to the inherent uncertainty in the frequency and severity of claims. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Companys self-insurance claims process, including a control related to the development of the assumptions used to estimate the self-insurance claims liability. We involved actuarial professionals with specialized skills and knowledge, who assisted in assessing the actuarial model used by the Company, including the external actuarial report obtained by the Company, to estimate the self-insurance claims liability for consistency with generally accepted actuarial standards. The actuarial professionals also developed an estimate of the range of the self-insurance claims liability using the Companys historical claims data. We compared the estimated range of the self-insurance claims liability to the amount recorded by the Company. We tested a sample of the claims data used in the actuarial model by comparing the data to underlying claims details. For certain claims, we obtained letters received directly from the Companys external legal counsel to evaluate the liability recorded. Additionally, we assessed the development of the self-insurance claims liability in the current year compared to recent historical trends and considered implications on the current year assumptions. We also assessed facts and circumstances received by the Company after the balance sheet date, but before the consolidated financial statements were issued, and the impact, if any, of such facts and circumstances on the self-insurance claims liability. /s/ KPMG LLP We have served as the Companys auditor since 1988. Jacksonville, Florida February23, 2026 71 [Table of Contents](#toc) Item9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item9A. Controls and Procedures Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out, under the supervision and with the participation of the Companys management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Companys 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 Companys disclosure controls and procedures were effective as of December27, 2025 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. 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. Internal Control Over Financial Reporting (a) Managements Report on Internal Control over Financial Reporting Management of Landstar System, Inc. (the Company) is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, as amended. Internal control over financial reporting is a process designed 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. The Companys internal control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the Companys financial statements. Management, with the participation of the Companys principal executive officer and principal financial officer, assessed the effectiveness of the Companys internal control over financial reporting as of December27, 2025. This assessment was performed using the criteria established under the Internal Control-Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error or circumvention or overriding of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and reporting and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the assessment performed using the criteria established by COSO, management has concluded that the Company maintained effective internal control over financial reporting as of December27, 2025. 72 [Table of Contents](#toc) KPMG LLP (PCAOB ID: 185), the independent registered public accounting firm that audited the financial statements included in this Annual Report on Form 10-K for the fiscal year ended December27, 2025, has issued an audit report on the effectiveness of the Companys internal control over financial reporting. Such report appears immediately below. (b) Attestation Report of the Registered Public Accounting Firm 73 [Table of Contents](#toc) Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Landstar System, Inc.: Opinion on Internal Control Over Financial Reporting We have audited Landstar System, Inc. and subsidiarys (the Company) internal control over financial reporting as of December27, 2025, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December27, 2025, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December27, 2025 and December28, 2024, the related consolidated statements of income, comprehensive income, changes in shareholders equity, and cash flows for each of the fiscal years in the three-year period ended December27, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February23, 2026 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A companys internal control over financial reporting is a process designed 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. A companys internal control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Jacksonville, Florida February23, 2026 74 [Table of Contents](#toc) (c) Changes in Internal Control Over Financial Reporting There were no significant changes in the Companys internal control over financial reporting during the Companys fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting. Item9B. Other Information Securities Trading Plans of Directors and Executive Officers During the fiscal year ended December27, 2025, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Landstars securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement. Amended & Restated Bylaws On February19, 2026, the Landstar System, Inc. Board of Directors adopted the Third Amended and Restated Bylaws of Landstar System, Inc. (as amended and restated, the Bylaws), effective on such date. Capitalized terms used but not defined in this Annual Report on Form 10-K shall have the meanings ascribed to them in the Bylaws. The changes to the Bylaws include the following: | | | | Article I, Section 1.02 (Special Meetings). Updated to (1)permit stockholders who own (or stockholders acting as nominee of behalf of other persons who own) at least twenty percent (20%) of the total voting power of all of the then-outstanding shares of voting stock of the Company and who have continuously held (or, in the case of stockholders acting as nominee on behalf of other persons, which persons have continuously held) such amount of shares of voting stock of the Company for at least one year prior to the date of the request, to request that the Secretary call a special meeting of stockholders, (2)establish procedural requirements for such stockholder requests for a special meeting of stockholders, including guidelines for acceptable delivery methods for such requests and (3)specify that the Board of Directors shall determine the place, date and time of any special meeting called at the request of one or more stockholders. | | | | | | Article I, Section 1.12 (Stockholder Meetings Nominations and Other Proposals). Updated to (1)clarify that in no event will an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a notice of a stockholder nomination or a stockholder proposal, (2)expand and enhance the disclosures and representations required to be made in the notice of a stockholder nomination as to the person nominated for election to the Board of Directors and (3)expand and enhance the disclosures and representations required to be made in the notice of a stockholder nomination as to the stockholder of record, including to cover any other person or persons acting in concert with such stockholder. | | | | | | Article II, Section 2.11 (Resignations of Directors). Revised to remove language that provided that a resignation conditioned upon a directors failure to obtain a specified vote for re-election is irrevocable. | | | | | | Article II, Section 2.13 (Vacancies and Newly Created Directorships). Updated to clarify that vacancies and newly created directorships can be filled solely by a majority of the directors then in office, or by a sole remaining director. | | | | | | Article IV, Section 4.06 (Security). Deleted in its entirety. | | | | | | Article VI, Section 6.01 (Indemnification). Updated to (1)specify that indemnification shall be provided to the full extent permitted by subsequent amendments to the General Corporation Law of the State of Delaware (the DGCL) and other applicable law, but only to the extent that such amendments permit the Company to provide broader indemnification rights than previously permitted and (2)provide further detail (i)on when a present or former director or officer of the Company will be deemed to have been successful on the merits or otherwise in defense of any proceeding arising from such persons service to the Company and (ii)on certain events that will not be deemed to create a presumption that such person did not act in good faith or in a manner that such person believed to be in or not in opposition to the best interests of the Company for purposes of indemnification by the Company. | | | | | | Article VI, Section 6.04 (Burden of Proof). Updated to specify that the Company must demonstrate by a preponderance of the evidence that the applicable standard of conduct was not met in any proceeding brought to enforce the right of a person to receive indemnification. | | | | | | Article VI, Section 6.06 (Insurance). Updated to provide that the Company will (rather than may) purchase and maintain director and officer insurance. | | In addition, certain non-substantive language and conforming changes, other technical edits and updates consistent with the DGCL were made to the Bylaws. The foregoing summary of the changes effectuated by the amendment and restatement of the Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is included as Exhibit 3.2 hereto and incorporated herein by reference. Item9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 75 [Table of Contents](#toc) PART III Item10. Directors, Executive Officers and Corporate Governance The information required by this Item concerning the Directors (and nominees for Directors) and Executive Officers of the Company will be set forth under the captions Election of Directors, Directors of the Company, Information Regarding Board of Directors and Committees, and Executive Officers of the Company and Section16(a) Beneficial Ownership Reporting Compliance in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference. The information required by this Item concerning the Companys Audit Committee and the Audit Committees Financial Expert will be set forth under the caption Information Regarding Board of Directors and Committees and Report of the Audit Committee in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference. The Company has adopted a Code of Ethics and Business Conduct that applies to each of its directors and employees, including its principal executive officer, principal financial officer, controller and all other employees performing similar functions. The Code of Ethics and Business Conduct is available on the Companys website at www.landstar.com under Investor Relations Corporate Governance. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waivers from, a provision or provisions of the Code of Ethics and Business Conduct by posting such information on its website at the web address indicated above. We have adopted insider trading policies and procedures that govern the purchase, sale and/or other dispositions of our securities by directors, officers, and employees, together with their immediate family members and other persons living in their households. We believe our insider trading policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable NASDAQ standards. While the Companys Insider Trading Policy is designed to apply to individuals, as described above, rather than transactions by the Company in its own securities, it is the Companys policy with respect to transactions in its securities to comply with all applicable insider trading laws and NASDAQ standards. Item11. Executive Compensation The information required by this Item will be set forth under the captions Compensation Committee Interlocks and Insider Participation, Compensation of Directors, Compensation of Named Executives, Compensation Discussion and Analysis, Summary Compensation Table, Pay Versus Performance Table, Grants of Plan-Based Awards, Stock Vested, Outstanding Equity Awards at Fiscal Year End, Nonqualified Deferred Compensation, Compensation Committee Report and Key Executive Employment Protection Agreements in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference. Item12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item pursuant to Item 201(d) of Regulation S-K is set forth under the caption Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in Part II, Item 5 of this report, and is incorporated herein by reference. The information required by this Item pursuant to Item 403 of Regulation S-K will be set forth under the caption Security Ownership by Management and Others in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference. Item13. Certain Relationships and Related Transactions, and Director Independence None, other than information required to be disclosed under this item in regard to Director Independence, which will be set forth under the caption Independent Directors in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A and is incorporated herein by reference. 76 [Table of Contents](#toc) Item14. Principal Accounting Fees and Services The information required by this item will be set forth under the caption Report of the Audit Committee and Ratification of Appointment of Independent Registered Public Accounting Firm in the Companys definitive Proxy Statement for its annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference. 77 [Table of Contents](#toc) PART IV Item15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements and Supplementary Data | | | | | Page | | | | Consolidated Balance Sheets | | | 44 | | | | Consolidated Statements of Income | | | 45 | | | | Consolidated Statements of Comprehensive Income | | | 46 | | | | Consolidated Statements of Cash Flows | | | 47 | | | | Consolidated Statements of Changes in Shareholders Equity | | | 48 | | | | Notes to Consolidated Financial Statements | | | 49 | | | | Report of Independent Registered Public Accounting Firm | | | 70 | | | (2) Financial Statement Schedules Financial statement schedules have been omitted because the required information is included in the consolidated financial statements or the notes thereto, or is not applicable or required. (3) Exhibits | | | Exhibit No. | | Description | | | | | (3) | | Articles of Incorporation and By-Laws: | | | | | 3.1 | | Restated Certificate of Incorporation of the Company dated May10, 2023, including Certificate of Designation of Junior Participating Preferred Stock dated February10, 1993. (Incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K filed on May11, 2023 (Commission File No.0-21238)) | | | | | 3.2* | | The Companys Third Amended and Restated Bylaws, as adopted as of February19, 2026. | | | | | (4) | | Instruments defining the rights of security holders, including indentures: | | | | | 4.1 P | | Specimen of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on Form S-1 (Registration No.33-57174)) | | | | | 4.2 | | Description of Securities (Incorporated by reference to Exhibit 4.4 to the Registrants Annual Report on Form 10-K for fiscal year ended December28, 2019 (Commission File No.0-21238)) | | | | | (10) | | Material contracts: | | | | | 10.1+ | | Second Amended and Restated Credit Agreement, dated as of July1, 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 Registrants Form 8-K filed on July8, 2022 (Commission File No.0-21238)) | | | | | 10.2+ | | First Amendment to Second Amended and Restated Credit Agreement, dated as of June21, 2024, 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 Registrants Form 10-Q filed on July31, 2024 (Commission File No.0-21238)) | | | | | 10.3+ | | Landstar System, Inc. Supplemental Executive Retirement Plan, as amended and restated as of January1, 2015 (Incorporated by reference to Exhibit 10.2 to the Registrants Annual Report on Form 10-K for the fiscal year ended December27, 2014 (Commission File No.0-21238)) | | | | | 10.4+ | | First Amendment, dated as of November1, 2018, to the Landstar System, Inc. Supplemental Executive Retirement Plan (as amended and restated as of January1, 2015) (Incorporated by reference to Exhibit 10.3 to the Registrants Annual Report on Form 10-K for the fiscal year ended December29, 2018 (Commission File No.0-21238)) | | 78 [Table of Contents](#toc) | | | 10.5+ | | Landstar System, Inc. 2011 Equity Incentive Plan, as amended through November2, 2023. (Incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 10-Q filed on November3, 2023 (Commission File No.0-21238)) | | | | | 10.6+ | | Landstar System, Inc. 2022 Directors Stock Compensation Plan (Incorporated by reference to Appendix A to the Registrants Definitive Proxy Statement filed on March29, 2022 (Commission File No.0-21238)) | | | | | 10.7+ | | Form of Indemnification Agreement between the Company and each of the directors and Executive Officers of the Company (Incorporated by reference to Exhibit 10.2 to the Registrants Annual Report on Form 10-K for the fiscal year ended December27, 2003 (Commission File No.0-21238)) | | | | | 10.8+ | | Form of Key Executive Employment Protection Agreement between Landstar System, Inc. and certain of the Executive Officers of the Company, in the form as amended as of December26, 2015, (Incorporated by reference to Exhibit 10.12 to the Registrants Annual Report on Form 10-K for fiscal year ended December26, 2015 (Commission File No.0-21238)) | | | | | 10.9+ | | Form of Notice of 2025 Performance Related Stock Awards under the 2011 Equity Incentive Plan, with Restrictive Covenant Agreement included at Appendix A (Incorporated by reference to Exhibit 10.9 to the Registrants Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (Commission File No. 0-21238)) | | | | | 10.10+* | | Form of Notice of 2026 Performance Related Stock Awards under the 2011 Equity Incentive Plan | | | | | 10.11+ | | Letter Agreement, dated December4, 2023, between Landstar System, Inc. and Frank A. Lonegro (Incorporated by reference to Exhibit 99.2 to the Registrants Current Report on Form 8-K filed on December5, 2023 (Commission File No.0-21238)) | | | | | 10.12+ | | Total Shareholder Return Performance Related Stock Award Agreement, between Landstar System, Inc. and Frank A. Lonegro, dated February2, 2024 (Incorporated by reference to Exhibit 10.11 to the Registrants Annual Report on Form 10-K for the fiscal year ended December30, 2023 (Commission File No.0-21238)) | | | | | 10.13+* | | Landstar System, Inc. Incentive Compensation Plan | | | | | (19) | | Insider Trading Policies and Procedures: | | | | | 19.1 | | Insider Trading Policy, dated as of February20, 2025 (Incorporated by reference to Exhibit 19.1 to the Registrants Annual Report on Form 10-K for the fiscal year ended December28, 2024 (Commission File No.0-21238)) | | | | | (21) | | Subsidiaries of the Registrant: | | | | | 21.1* | | List of Subsidiaries of the Registrant | | | | | (23) | | Consents of experts and counsel: | | | | | 23.1* | | Consent of KPMG LLP as Independent Registered Public Accounting Firm | | | | | (24) | | Power of attorney: | | | | | 24.1* | | Powers of Attorney | | | | | (31) | | Certifications pursuant to Section302 of the Sarbanes-Oxley Act of 2002: | | | | | 31.1* | | Chief Executive Officer certification, as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002 | | | | | 31.2* | | Chief Financial Officer certification, as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002 | | | | | (32) | | Certifications pursuant to Section906 of the Sarbanes-Oxley Act of 2002: | | 79 [Table of Contents](#toc) | | | 32.1** | | Chief Executive Officer certification pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 | | | | | 32.2** | | Chief Financial Officer certification pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 | | | | | (97) | | | | | | 97.1+ | | Landstar System, Inc. Clawback Policy, as adopted on August10, 2023 | | | | | 101* | | The following materials from the Companys Annual Report on Form 10-K for the fiscal year ended December27, 2025, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii)Consolidated Statements of Comprehensive Income, (iv)Consolidated Statements of Cash Flows, (v)Consolidated Statements of Changes in Shareholders Equity, (vi)Notes to Consolidated Financial Statements, and (vii)Financial Statement Schedule. | | | | | 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. | | THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO ANY SHAREHOLDER OF THE COMPANY WHO SO REQUESTS IN WRITING, A COPY OF ANY EXHIBITS, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE DIRECTED TO LANDSTAR SYSTEM, INC., ATTENTION: INVESTOR RELATIONS, 13410 SUTTON PARK DRIVE SOUTH, JACKSONVILLE, FLORIDA 32224. 80 [Table of Contents](#toc) SIGNATURES Pursuant to the requirements of Section13 or 15(d) 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. | | | Date: February23, 2026 | | | LANDSTAR SYSTEM, INC. | | | | | | | By: | | /s/ FRANK A. LONEGRO | | | | | | Frank A. Lonegro | | | | | | President and Chief Executive Officer | | | | | | | By: | | /s/ JAMES P. TODD | | | | | | James P. Todd | | | | | | Vice President, Chief Financial Officer and Assistant Secretary | | Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | | | Signature | | | | Title | | Date | | | | | /s/ FRANK A. LONEGRO Frank A. Lonegro | | | President and Chief Executive Officer; Principal Executive Officer; Director | | February23, 2026 | | | | | | | | | /s/ JAMES P. TODD | | | Vice President and Chief Financial Officer | | February23, 2026 | | | James P. Todd | | | and Assistant Secretary; Principal Financial Officer and | | | | | | Principal Accounting Officer | | | | | | * | | | Director | | February23, 2026 | | | Homaira Akbari | | | | | | | | * | | | Director | | February23, 2026 | | | David G. Bannister | | | | | | | | * | | | Director | | February23, 2026 | | | J. Barr Blanton | | | | | | | | * | | | Director | | February23, 2026 | | | Melanie M. Hart | | | | | | | | * | | | Director | | February23, 2026 | | | James L. Liang | | | | | | | | * | | | Chairman of the Board | | February23, 2026 | | | Diana M. Murphy | | | | | | | | * | | | Director | | February23, 2026 | | | Anthony J. Orlando | | | | | | | | * | | | Director | | February23, 2026 | | | George P. Scanlon | | | | | | | | * | | | Director | | February23, 2026 | | | Teresa L. White | | | | | | | | By: | | /s/ MICHAEL K. KNELLER | | | | Michael K. Kneller | | | | Attorney In Fact* | | 81