(9)

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.

The following table summarizes the effect of the increase in the cost of insurance claims resulting from unfavorable development of prior year self-insured claims estimates on operating income, net income and earnings per share amounts in the consolidated statements of income for the thirteen-week periods ended March 28, 2015 and March 29, 2014 (in thousands, except per share amounts):


	Thirteen Weeks Ended
	March 28, 2015		March 29, 2014
Operating income	$	4,641	$	1,891
Net income		2,868		1,169

Earnings per share	$	0.06	$	0.03
Diluted earnings per share	$	0.06	$	0.03

The unfavorable development of prior years’ claims in the 2015 fiscal period primarily related to impact of the Verdict described in Footnote (8) “Commitments and Contingencies.”