Segment Information

12 Months Ended

Dec. 30, 2023

Segment Information

(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. Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Company’s 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 Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $5.3 billion 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, 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 and military equipment. 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 Company’s transportation logistics segment.

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 Landstar’s operating subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance directly to certain of Landstar’s 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 Company evaluates a segment’s performance based on operating income.

No single customer accounted for more than 10% of the Company’s consolidated revenue in fiscal years 2023, 2022 and 2021. Substantially all of the Company’s revenue is generated in North America, primarily through customers located in the United States.

The following tables summarize information about the Company’s reportable business segments as of and for the fiscal years ending December 30, 2023, December 31, 2022 and December 25, 2021 (in thousands):

	Transportation Logistics			Insurance		Total
2023
External revenue	$	5,230,846		$	72,476	$	5,303,322
Internal revenue					67,977		67,977
Investment income					10,141		10,141
Interest and debt (income) expense		(3,946	)				(3,946	)
Depreciation and amortization		58,153					58,153
Operating income		288,574			55,575		344,149
Expenditures on long-lived assets		25,688					25,688
Goodwill		42,275					42,275
Finance lease additions		4,093					4,093
Total assets		1,463,236			338,610		1,801,846
2022
External revenue	$	7,358,008		$	78,554	$	7,436,562
Internal revenue					79,229		79,229
Investment income					3,162		3,162
Interest and debt expense		3,620					3,620
Depreciation and amortization		57,453					57,453
Operating income		524,500			46,583		571,083
Expenditures on long-lived assets		26,005					26,005
Goodwill		41,220					41,220
Finance lease additions		30,659					30,659
Total assets		1,704,557			227,322		1,931,879
2021
External revenue	$	6,465,711		$	71,857	$	6,537,568
Internal revenue					62,558		62,558
Investment income					2,857		2,857
Interest and debt expense		3,976					3,976
Depreciation and amortization		49,609					49,609
Operating income		464,282			41,386		505,668
Expenditures on long-lived assets		23,261					23,261
Goodwill		40,768					40,768
Finance lease additions		48,674					48,674
Total assets		1,736,854			308,611		2,045,465