<SEC-DOCUMENT>0001193125-23-237630.txt : 20231024
<SEC-HEADER>0001193125-23-237630.hdr.sgml : 20231024
<ACCEPTANCE-DATETIME>20230919160758
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-23-237630
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20230919

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LANDSTAR SYSTEM INC
		CENTRAL INDEX KEY:			0000853816
		STANDARD INDUSTRIAL CLASSIFICATION:	TRUCKING (NO LOCAL) [4213]
		IRS NUMBER:				061313069
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1228

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		13410 SUTTON PARK DRIVE SOUTH
		CITY:			JACKSONVILLE
		STATE:			FL
		ZIP:			32224
		BUSINESS PHONE:		9043989400

	MAIL ADDRESS:	
		STREET 1:		LANDSTAR SYSTEM INC
		STREET 2:		13410 SUTTON PARK DRIVE SOUTH
		CITY:			JACKSONVILLE
		STATE:			FL
		ZIP:			32224
</SEC-HEADER>
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<TYPE>CORRESP
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">September&nbsp;19, 2023 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>VIA EDGAR AND FEDERAL EXPRESS </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange
Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporate Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Energy
and Transportation </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C.
20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">Re:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Landstar System, Inc. </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman">Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2022 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman">Filed February&nbsp;24, 2023 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman">File <FONT STYLE="white-space:nowrap">No.&nbsp;000-21238</FONT> </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This letter sets forth the
responses of Landstar System, Inc. (the &#147;Company&#148; and, collectively with its subsidiaries and affiliates, &#147;Landstar&#148;) to the comments of the staff (the &#147;Staff&#148;) of the Securities and Exchange Commission (the
&#147;Commission&#148;) contained in the letter, dated August&nbsp;29, 2023, relating to the Company&#146;s Annual Report on Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the annual period ended December&nbsp;31, 2022 (the &#147;2022 Form <FONT
STYLE="white-space:nowrap">10-K&#148;)</FONT> filed with the Commission on February&nbsp;24, 2023, as discussed with the Staff on September&nbsp;18, 2023. The comments of the Commission are set forth in bold/italics and the Company&#146;s responses
are set forth in plain text immediately following each comment. Please let us know if we can provide additional information to assist in the review process. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year ended December&nbsp;31, 2022 </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Financial Statements </U></B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Consolidated Statements
of Income, page 40 </U></B></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><B><I>1.</I></B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B><I>We note that you have omitted the required disclosures of basic earnings per share and details of the
underlying computations from your annual and subsequent interim reports and expect you will need to amend these filings to include this information. </I></B></P></TD></TR></TABLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman"><B><I>Please revise the Consolidated Statements of Income to include basic earnings per
share for each period, in addition to the diluted earnings per share that is currently presented, to comply with FASB ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-2</FONT></FONT></FONT> and Rule <FONT STYLE="white-space:nowrap">5-03.25</FONT> of Regulation <FONT STYLE="white-space:nowrap">S-X.</FONT>
</I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman"><B><I>Please revise the notes to the Consolidated Financial Statements to include a reconciliation of the numerators and
denominators of the basic and diluted <FONT STYLE="white-space:nowrap">per-share</FONT> computations for each period to comply with FASB ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-50-1.</FONT></FONT></FONT> </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman"><B><I>You may refer to FASB ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">270-10-50-1(b)</FONT></FONT></FONT> and Rule <FONT STYLE="white-space:nowrap">10-01(b)(2)</FONT> of Regulation
<FONT STYLE="white-space:nowrap">S-X</FONT> if you require further clarification or guidance on the interim reporting requirements. </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:9%; font-size:10pt; font-family:Times New Roman"><B><I>We believe that you will need to consult with your auditor regarding changes to your financial statements and arrange to obtain and file
an updated or dual dated audit opinion that extends audit coverage to this additional information. </I></B></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As reflected in the Staff&#146;s comment, the Company&#146;s Consolidated Statements of Income included in its 2022 Form <FONT
STYLE="white-space:nowrap">10-K</FONT> reported &#147;Diluted earnings per share&#148; for the fiscal years ended December&nbsp;31, 2022, December&nbsp;25, 2021, and December&nbsp;26, 2020. The Company confirms to the Staff that in each such fiscal
year, and in all subsequent interim periods, basic earnings per share (&#147;basic EPS&#148;) and diluted earnings per share (&#147;diluted EPS&#148;) were the same amount, and as further discussed below, there were no items to reconcile between the
basic and diluted weighted-average number of common shares outstanding with respect to any of the fiscal periods presented. As a result, as further discussed below, the Company does not believe amendment of historical filings is necessary and
proposes to include clarifying revisions in its future filings. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company has historically reported diluted EPS, as this information is
of significant interest to investors. FASB ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-7</FONT></FONT></FONT> states that &#147;[i]f diluted EPS is reported for one period, then it
must be reported for all periods presented, even if they are the same amounts as basic EPS.&#148; The immediately following sentence of FASB ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-7</FONT></FONT></FONT> states that &#147;If basic and diluted EPS are the same amount, dual presentation can be accomplished in one line
item on the income statement.&#148; When read together, these two sentences have been interpreted by the Company to permit the presentation of a single line item referred to as &#147;Diluted earnings per share&#148;. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">To address the Staff&#146;s comment and to remove any potential confusion, the Company proposes in future filings to change the caption on the
Consolidated Statements of Income from &#147;Diluted earnings per share&#148; to &#147;Basic and diluted earnings per share&#148;. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">With respect to the Staff&#146;s comment requesting the inclusion of a reconciliation of the
numerators and denominators of the basic and diluted <FONT STYLE="white-space:nowrap">per-share</FONT> computations for each period presented, the Company respectfully advises the Staff of its belief that no such reconciliation is required or
possible, as there are no items to reconcile for any of the periods presented in the 2022 Form <FONT STYLE="white-space:nowrap">10-K.</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">FASB ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-10</FONT></FONT></FONT>
provides that basic EPS shall be computed by dividing&nbsp;<U>income available to common stockholders</U>&nbsp;(the numerator) by the&nbsp;<U>weighted-average number of common shares outstanding</U> (the denominator) during the applicable period.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">FASB ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-16</FONT></FONT></FONT> provides that the computation of diluted EPS is similar to the computation of basic EPS except that the denominator
(i.e., <U>weighted-average number of common shares outstanding</U>) is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.</P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In each of the periods presented in the 2022 Form <FONT STYLE="white-space:nowrap">10-K,</FONT> the weighted-average number of common shares
outstanding (i.e., the denominator) is the same for purposes of the calculations of both basic EPS and diluted EPS.&nbsp;This is because, as disclosed on page 47 of the 2022 Form <FONT STYLE="white-space:nowrap">10-K:</FONT> </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">&#147;Earnings per common share are based on the weighted average number of shares outstanding, including outstanding <FONT
STYLE="white-space:nowrap">non-vested</FONT> restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares and Deferred Stock Units outstanding plus the incremental shares
that would have been outstanding upon the assumed exercise of all dilutive stock options. During the fiscal years ended December&nbsp;31, 2022, December&nbsp;25, 2021 and December&nbsp;26, 2020, in reference to the determination of diluted earnings
per share, the future compensation cost attributable to outstanding shares of <FONT STYLE="white-space:nowrap">non-vested</FONT> restricted stock exceeded the impact of incremental shares that would have been outstanding upon the assumed exercise of
all dilutive stock options.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In other words, the impact on EPS of future compensation expense related to outstanding, unvested time-based awards is
greater than the incremental impact of outstanding dilutive stock options in all periods presented, and would therefore have an anti-dilutive effect on EPS if included in the calculation of EPS.&nbsp;Accordingly, as per FASB ASC <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-45-17,</FONT></FONT></FONT> the computation of diluted EPS should not assume conversion, exercise, or&nbsp;contingent issuance of these securities as
the inclusion of such securities would have an anti-dilutive effect on EPS. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Accordingly, the Company does not believe a reconciliation is required or possible in this
instance to comply with FASB ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">260-10-50-1,</FONT></FONT></FONT> as there are no items to reconcile between either the numerators or the
denominators of the basic and diluted EPS computations for any of the periods presented. To address the Staff&#146;s comment regarding this matter, the Company proposes to clarify in future filings whether there are any reconciling items between the
weighted-average number of common shares used in the basic EPS calculation and the diluted EPS calculation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company does not intend
to file amendments to the 2022 Form <FONT STYLE="white-space:nowrap">10-K</FONT> and subsequent interim reports, as the Company believes that doing so solely to revise the name of a line item from &#147;Diluted earnings per share&#148; to
&#147;Basic and diluted earnings per share&#148; would be confusing to investors. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&#8195;&#8195;*&#8195;&#8195;*&#8195;&#8195;* </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If you have any questions regarding this letter, please do not hesitate to call me at (904) <FONT STYLE="white-space:nowrap">390-1558.</FONT>
</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ James P. Todd</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">James P. Todd</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Vice President and Chief Financial Officer</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Michael K. Kneller, Vice President, General Counsel and Secretary </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Yolanda Guobadia, Division of Corporate Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Gus Rodriguez, Division of Corporate Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Steven J. Slutzky, Debevoise&nbsp;&amp; Plimpton LLP </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Benjamin R. Pedersen, Debevoise&nbsp;&amp; Plimpton LLP </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>

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