Change in Accounting Estimate for Self-Insured Claims

9 Months Ended

Sep. 27, 2025

Change in Accounting Estimate for Self-Insured Claims

(12)	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 thirty-nine-week and thirteen-week periods ended September 27, 2025 and September 28, 2024 (in thousands, except per share amounts):


	Thirty-Nine Weeks Ended				Thirteen Weeks Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Operating income	$	22,860	$	6,666	$	9,219	$	4,550
Net income	$	17,236	$	5,046	$	6,951	$	3,444
Basic and diluted earnings per share	$	0.49	$	0.14	$	0.20	$	0.10

The unfavorable development of prior years’ claims during the thirty-nine-week period ended September 27, 2025 was primarily attributable to elevated cargo loss experience as a result of fraud and theft in the supply chain and several specific commercial trucking claims.