##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2007ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  0-21238
 
 LANDSTAR SYSTEM, INC.
  Delaware
(State or other jurisdiction 
of incorporation or organization)
    
    06-1313069
(I.R.S. Employer
Identification No.)
 13410 Sutton Park Drive South, Jacksonville, Florida   32224   (904) 398-9400   N/A
  þ o
  þ o o
  o þ




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##### 



PART I Financial InformationItem 1.Financial StatementsConsolidated Balance Sheets as of June 30, 2007 and December 30, 2006
    
    Page 3Consolidated Statements of Income for the Twenty Six and Thirteen Weeks Ended June 30, 2007 and July 1, 2006
    
    Page 4Consolidated Statements of Cash Flows for the Twenty Six Weeks Ended June 30, 2007 and July 1, 2006
    
    Page 5Consolidated Statement of Changes in Shareholders Equity for the Twenty Six Weeks Ended June 30, 2007
    
    Page 6Notes to Consolidated Financial Statements
    
    Page 7Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Page 11Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    Page 19Item 4.Controls and Procedures
    
    Page 19PART II Other InformationItem 1.Legal Proceedings
    
    Page 20Item 1A.Risk Factors
    
    Page 20Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    Page 21Item 4.Submission of Matters to a Vote of Security Holders
    
    Page 22Item 6.Exhibits
    
    Page 22Signatures
    
    Page 24
 
 PART I 
 
    2




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##### 



June 30,
    
    
    Dec. 30,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    56,162
    
    
    $
    91,491Short-term investments
    
    
    20,741
    
    
    
    21,548Trade accounts receivable, less allowance of $4,939 and $4,834
    
    
    311,125
    
    
    
    318,983Other receivables, including advances to independent contractors, less
allowance of $4,694 and $4,512
    
    
    13,919
    
    
    
    14,198Deferred income taxes and other current assets
    
    
    38,057
    
    
    
    25,142Total current assets
    
    
    440,004
    
    
    
    471,362Operating property, less accumulated depreciation and amortization of $80,274
and $77,938
    
    
    118,067
    
    
    
    110,957Goodwill
    
    
    31,134
    
    
    
    31,134Other assets
    
    
    36,395
    
    
    
    33,198Total assets
    
    $
    625,600
    
    
    $
    646,651LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCash overdraft
    
    $
    28,067
    
    
    $
    25,435Accounts payable
    
    
    128,611
    
    
    
    122,313Current maturities of long-term debt
    
    
    20,097
    
    
    
    18,730Insurance claims
    
    
    27,364
    
    
    
    25,238Other current liabilities
    
    
    56,184
    
    
    
    58,478Total current liabilities
    
    
    260,323
    
    
    
    250,194Long-term debt, excluding current maturities
    
    
    76,535
    
    
    
    110,591Insurance claims
    
    
    41,790
    
    
    
    36,232Deferred income taxes
    
    
    21,154
    
    
    
    19,360Shareholders EquityCommon stock, $0.01 par value, authorized 160,000,000 shares, issued
65,410,393 and 64,993,143
    
    
    654
    
    
    
    650Additional paid-in capital
    
    
    123,360
    
    
    
    108,020Retained earnings
    
    
    547,192
    
    
    
    499,273Cost of 10,534,724 and 9,028,009 shares of common stock in treasury
    
    
    (445,416
    )
    
    
    (377,662
    )Accumulated other comprehensive income (loss)
    
    
    8
    
    
    
    (7
    )Total shareholders equity
    
    
    225,798
    
    
    
    230,274Total liabilities and shareholders equity
    
    $
    625,600
    
    
    $
    646,651
  3




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##### 



Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    1,209,601
    
    
    $
    1,253,280
    
    
    $
    632,952
    
    
    $
    643,238Investment income
    
    
    2,997
    
    
    
    1,252
    
    
    
    1,257
    
    
    
    873Costs and expenses:Purchased transportation
    
    
    912,835
    
    
    
    944,309
    
    
    
    478,777
    
    
    
    486,059Commissions to agents
    
    
    97,404
    
    
    
    97,521
    
    
    
    50,772
    
    
    
    50,510Other operating costs
    
    
    13,222
    
    
    
    22,288
    
    
    
    7,716
    
    
    
    10,220Insurance and claims
    
    
    29,559
    
    
    
    20,574
    
    
    
    12,019
    
    
    
    9,022Selling, general and administrative
    
    
    63,920
    
    
    
    70,924
    
    
    
    30,755
    
    
    
    35,088Depreciation and amortization
    
    
    9,279
    
    
    
    8,050
    
    
    
    4,662
    
    
    
    3,957Total costs and expenses
    
    
    1,126,219
    
    
    
    1,163,666
    
    
    
    584,701
    
    
    
    594,856Operating income
    
    
    86,379
    
    
    
    90,866
    
    
    
    49,508
    
    
    
    49,255Interest and debt expense
    
    
    2,700
    
    
    
    3,142
    
    
    
    1,108
    
    
    
    1,292Income before income taxes
    
    
    83,679
    
    
    
    87,724
    
    
    
    48,400
    
    
    
    47,963Income taxes
    
    
    32,405
    
    
    
    33,909
    
    
    
    18,730
    
    
    
    18,498Net income
    
    $
    51,274
    
    
    $
    53,815
    
    
    $
    29,670
    
    
    $
    29,465Earnings per common share
    
    $
    0.92
    
    
    $
    0.92
    
    
    $
    0.53
    
    
    $
    0.50Diluted earnings per share
    
    $
    0.91
    
    
    $
    0.90
    
    
    $
    0.53
    
    
    $
    0.50Average number of shares outstanding:Earnings per common share
    
    
    55,761,000
    
    
    
    58,700,000
    
    
    
    55,597,000
    
    
    
    58,499,000Diluted earnings per share
    
    
    56,328,000
    
    
    
    59,665,000
    
    
    
    56,191,000
    
    
    
    59,287,000Dividends paid per common share
    
    $
    0.060
    
    
    $
    0.050
    
    
    $
    0.030
    
    
    $
    0.025
  4




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##### 



Twenty Six Weeks EndedJune 30,
    
    
    July 1,2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    51,274
    
    
    $
    53,815Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of operating property
    
    
    9,279
    
    
    
    8,050Non-cash interest charges
    
    
    87
    
    
    
    87Provisions for losses on trade and other accounts receivable
    
    
    2,040
    
    
    
    3,287(Gains) losses on sales of operating property
    
    
    (1,735
    )
    
    
    112Director compensation paid in common stock
    
    
    600
    
    
    
    265Deferred income taxes, net
    
    
    1,758
    
    
    
    (653
    )Stock-based compensation
    
    
    3,644
    
    
    
    3,297Changes in operating assets and liabilities:Decrease in trade and other accounts receivable
    
    
    6,097
    
    
    
    156,985Increase in other assets
    
    
    (11,804
    )
    
    
    (9,245
    )Increase (decrease) in accounts payable
    
    
    6,298
    
    
    
    (30,225
    )Decrease in other liabilities
    
    
    (2,303
    )
    
    
    (9,336
    )Increase (decrease) in insurance claims
    
    
    7,684
    
    
    
    (1,851
    )NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    72,919
    
    
    
    174,588INVESTING ACTIVITIESNet change in other short-term investments
    
    
    (934
    )
    
    
    (3,306
    )Sales and maturities of investments
    
    
    23,507
    
    
    
    17,929Purchases of investments
    
    
    (26,101
    )
    
    
    (18,094
    )Purchases of operating property
    
    
    (3,652
    )
    
    
    (1,214
    )Proceeds from sales of operating property
    
    
    3,672
    
    
    
    1,057NET CASH USED BY INVESTING ACTIVITIES
    
    
    (3,508
    )
    
    
    (3,628
    )FINANCING ACTIVITIESIncrease (decrease) in cash overdraft
    
    
    2,632
    
    
    
    (5,017
    )Dividends paid
    
    
    (3,355
    )
    
    
    (2,944
    )Proceeds from exercises of stock options
    
    
    9,398
    
    
    
    5,975Excess tax benefit on stock option exercises
    
    
    1,702
    
    
    
    3,269Purchases of common stock
    
    
    (67,754
    )
    
    
    (54,694
    )Principal payments on long-term debt and capital lease obligations
    
    
    (47,363
    )
    
    
    (66,132
    )NET CASH USED BY FINANCING ACTIVITIES
    
    
    (104,740
    )
    
    
    (119,543
    )Increase (decrease) in cash and cash equivalents
    
    
    (35,329
    )
    
    
    51,417Cash and cash equivalents at beginning of period
    
    
    91,491
    
    
    
    29,398Cash and cash equivalents at end of period
    
    $
    56,162
    
    
    $
    80,815
  5




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##### 



AccumulatedAddl
    
    
    
    
    
    
    Treasury Stock
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    at Cost
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Shares
    
    
    Amount
    
    
    Income (Loss)
    
    
    TotalBalance December 30, 2006
    
    
    64,993,143
    
    
    $
    650
    
    
    $
    108,020
    
    
    $
    499,273
    
    
    
    9,028,009
    
    
    $
    (377,662
    )
    
    $
    (7
    )
    
    $
    230,274Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,274Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,355
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,355
    )Director compensation paid
in common stock
    
    
    12,000
    
    
    
    
    
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600Purchases of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,506,715
    
    
    
    (67,754
    )
    
    
    
    
    
    
    (67,754
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    3,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,644Exercises of stock options,
including
excess tax benefit
    
    
    405,250
    
    
    
    4
    
    
    
    11,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,100Unrealized holding gains
on available-for-sale
investments, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    15Balance June 30, 2007
    
    
    65,410,393
    
    
    $
    654
    
    
    $
    123,360
    
    
    $
    547,192
    
    
    
    10,534,724
    
    
    $
    (445,416
    )
    
    $
    8
    
    
    $
    225,798
  6




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##### 



Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Total cost of share-based payment
plans during the period
    
    $
    3,644
    
    
    $
    3,297
    
    
    $
    1,852
    
    
    $
    1,886Amount of related income tax benefit
recognized during the period
    
    
    1,185
    
    
    
    1,063
    
    
    
    662
    
    
    
    596Net cost of share-based payment
plans during the period
    
    $
    2,459
    
    
    $
    2,234
    
    
    $
    1,190
    
    
    $
    1,290
  2007
    
    
    2006Expected volatility
    
    
    33.0
    %
    
    
    34.0
    %Expected dividend yield
    
    
    0.3
    %
    
    
    0.3
    %Risk-free interest rate
    
    
    4.75
    %
    
    
    4.75
    %Expected lives (in years)
    
    
    4.2
    
    
    
    4.5
   Weighted Average
    
    
    Weighted AverageNumber of
    
    
    Exercise Price
    
    
    Remaining Contractual
    
    
    Aggregate IntrinsicOptions
    
    
    per Share
    
    
    Term (years)
    
    
    Value (000s)Options outstanding at December 30, 2006
    
    
    2,566,571
    
    
    $
    27.35Granted
    
    
    266,500
    
    
    $
    42.97Exercised
    
    
    (405,250
    )
    
    $
    23.19Forfeited
    
    
    (2,500
    )
    
    $
    44.45Options outstanding at June 30, 2007
    
    
    2,425,321
    
    
    $
    29.74
    
    
    
    7.1
    
    
    $
    44,897Options exercisable at June 30, 2007
    
    
    962,039
    
    
    $
    22.68
    
    
    
    5.9
    
    
    $
    24,600
  7




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##### 



Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Average number
of common shares
outstanding
    
    
    55,761
    
    
    
    58,700
    
    
    
    55,597
    
    
    
    58,499Incremental shares
from assumed
exercises of stock
options
    
    
    567
    
    
    
    965
    
    
    
    594
    
    
    
    788Average number of
common shares and
common share
equivalents
outstanding
    
    
    56,328
    
    
    
    59,665
    
    
    
    56,191
    
    
    
    59,287
 8




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##### 



Twenty Six Week Period Ended June 30, 2007Carrier
    
    
    Global Logistics
    
    
    Insurance
    
    
    Other
    
    
    TotalExternal revenue
    
    $
    893,961
    
    
    $
    297,209
    
    
    $
    18,431
    
    
    
    
    
    
    $
    1,209,601Investment income
    
    
    
    
    
    
    
    
    
    
    2,997
    
    
    
    
    
    
    
    2,997Internal revenue
    
    
    23,226
    
    
    
    1,520
    
    
    
    16,823
    
    
    
    
    
    
    
    41,569Operating income
    
    
    89,878
    
    
    
    8,016
    
    
    
    14,009
    
    
    $
    (25,524
    )
    
    
    86,379Goodwill
    
    
    20,496
    
    
    
    10,638
    
    
    
    
    
    
    
    
    
    
    
    31,134
 Twenty Six Week Period Ended July 1, 2006Carrier
    
    
    Global Logistics
    
    
    Insurance
    
    
    Other
    
    
    TotalExternal revenue
    
    $
    895,933
    
    
    $
    340,467
    
    
    $
    16,880
    
    
    
    
    
    
    $
    1,253,280Investment income
    
    
    
    
    
    
    
    
    
    
    1,252
    
    
    
    
    
    
    
    1,252Internal revenue
    
    
    23,908
    
    
    
    999
    
    
    
    16,411
    
    
    
    
    
    
    
    41,318Operating income
    
    
    88,064
    
    
    
    17,022
    
    
    
    15,089
    
    
    $
    (29,309
    )
    
    
    90,866Goodwill
    
    
    20,496
    
    
    
    10,638
    
    
    
    
    
    
    
    
    
    
    
    31,134
 Thirteen Week Period Ended June 30, 2007Carrier
    
    
    Global Logistics
    
    
    Insurance
    
    
    Other
    
    
    TotalExternal revenue
    
    $
    470,387
    
    
    $
    153,344
    
    
    $
    9,221
    
    
    
    
    
    
    $
    632,952Investment income
    
    
    
    
    
    
    
    
    
    
    1,257
    
    
    
    
    
    
    
    1,257Internal revenue
    
    
    10,530
    
    
    
    698
    
    
    
    10,627
    
    
    
    
    
    
    
    21,855Operating income
    
    
    48,469
    
    
    
    3,328
    
    
    
    10,650
    
    
    $
    (12,939
    )
    
    
    49,508
 Thirteen Week Period Ended July 1, 2006Carrier
    
    
    Global Logistics
    
    
    Insurance
    
    
    Other
    
    
    TotalExternal revenue
    
    $
    467,620
    
    
    $
    167,042
    
    
    $
    8,576
    
    
    
    
    
    
    $
    643,238Investment income
    
    
    
    
    
    
    
    
    
    
    873
    
    
    
    
    
    
    
    873Internal revenue
    
    
    12,052
    
    
    
    639
    
    
    
    10,472
    
    
    
    
    
    
    
    23,163Operating income
    
    
    47,493
    
    
    
    8,295
    
    
    
    8,413
    
    
    $
    (14,946
    )
    
    
    49,255
   Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    51,274
    
    
    $
    53,815
    
    
    $
    29,670
    
    
    $
    29,465Unrealized holding gains on available
-for-sale investments, net of income taxes
    
    
    15
    
    
    
    153
    
    
    
    
    
    
    
    16Comprehensive income
    
    $
    51,289
    
    
    $
    53,968
    
    
    $
    29,670
    
    
    $
    29,481
 9




---



##### 



10




---



##### 



Introduction
     Changes in Financial Condition and Results of Operations
   11




---



##### 



Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Carrier Segment:External revenue generated through (in thousands):BCO Independent Contractors
    
    $
    639,656
    
    
    $
    640,596
    
    
    $
    340,258
    
    
    $
    336,803Truck Brokerage Carriers
    
    
    254,305
    
    
    
    255,337
    
    
    
    130,129
    
    
    
    130,817$
    893,961
    
    
    $
    895,933
    
    
    $
    470,387
    
    
    $
    467,620Revenue per revenue mile
    
    $
    2.00
    
    
    $
    2.00
    
    
    $
    2.02
    
    
    $
    2.01Revenue per load
    
    $
    1,591
    
    
    $
    1,594
    
    
    $
    1,611
    
    
    $
    1,607Average length of haul (miles)
    
    
    794
    
    
    
    797
    
    
    
    796
    
    
    
    800Number of loads
    
    
    562,000
    
    
    
    562,000
    
    
    
    292,000
    
    
    
    291,000Global Logistics Segment:External revenue generated through (in thousands):BCO Independent Contractors (1)
    
    $
    52,185
    
    
    $
    47,163
    
    
    $
    25,344
    
    
    $
    22,331Truck Brokerage Carriers
    
    
    165,895
    
    
    
    198,301
    
    
    
    85,942
    
    
    
    97,674Rail, air, ocean and bus carriers (2)
    
    
    79,129
    
    
    
    95,003
    
    
    
    42,058
    
    
    
    47,037$
    297,209
    
    
    $
    340,467
    
    
    $
    153,344
    
    
    $
    167,042Revenue per load (3)
    
    $
    1,506
    
    
    $
    1,504
    
    
    $
    1,460
    
    
    $
    1,507Number of loads (3)
    
    
    195,000
    
    
    
    189,000
    
    
    
    105,000
    
    
    
    97,000
 
 (1)
    
    Includes revenue from freight hauled by carrier segment BCO Independent Contractors
for global logistics customers.(2)
    
    Included in the 2007 and 2006 twenty six week period was $481,000 and $19,438,000,
respectively, of revenue attributable to buses provided under a contract between Landstar
Express America, Inc. and the United States Department of Transportation/Federal Aviation
Administration (the FAA). Included in the 2006 thirteen week period was $8,582,000 of
revenue attributable to buses provided under the FAA contract.(3)
    
    Number of loads and revenue per load in the twenty six week period ended June 30,
2007 exclude the effect of $3,445,000 of revenue derived under the FAA contract. Number of
loads and revenue per load in the twenty six and thirteen week periods ended July 1, 2006
exclude the effect of $56,297,000 and $20,848,000, respectively, of revenue derived from
transportation services provided under the FAA contract. See Use of Non-GAAP Financial
Measures.  June 30,2007
    
    
    July 1,2006BCO Independent Contractors
    
    
    8,431
    
    
    
    8,347Truck Brokerage Carriers:Approved and active (1)
    
    
    15,100
    
    
    
    14,034Other approved
    
    
    8,700
    
    
    
    7,97723,800
    
    
    
    22,011Total available truck capacity providers
    
    
    32,231
    
    
    
    30,358Number of trucks provided by BCO Independent Contractors
    
    
    9,036
    
    
    
    9,047
 
 (1)
    
    Active refers to Truck Brokerage Carriers who moved at least one load in the 180
days immediately preceding the fiscal quarter end.  12




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Twenty Six Weeks Ended
    
    
    Thirteen Weeks EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Investment income
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.1Costs and expenses:Purchased transportation
    
    
    75.5
    
    
    
    75.3
    
    
    
    75.7
    
    
    
    75.6Commissions to agents
    
    
    8.0
    
    
    
    7.8
    
    
    
    8.0
    
    
    
    7.8Other operating costs
    
    
    1.1
    
    
    
    1.8
    
    
    
    1.2
    
    
    
    1.6Insurance and claims
    
    
    2.4
    
    
    
    1.6
    
    
    
    1.9
    
    
    
    1.4Selling, general and administrative
    
    
    5.3
    
    
    
    5.7
    
    
    
    4.9
    
    
    
    5.4Depreciation and amortization
    
    
    0.8
    
    
    
    0.6
    
    
    
    0.7
    
    
    
    0.6Total costs and expenses
    
    
    93.1
    
    
    
    92.8
    
    
    
    92.4
    
    
    
    92.4Operating income
    
    
    7.1
    
    
    
    7.3
    
    
    
    7.8
    
    
    
    7.7Interest and debt expense
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.2
    
    
    
    0.2Income before income taxes
    
    
    6.9
    
    
    
    7.0
    
    
    
    7.6
    
    
    
    7.5Income taxes
    
    
    2.7
    
    
    
    2.7
    
    
    
    2.9
    
    
    
    2.9Net income
    
    
    4.2
    %
    
    
    4.3
    %
    
    
    4.7
    %
    
    
    4.6
    %
 13




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15




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16




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17




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18




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19




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PART II
 
       
   20




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Contract with the United States Department of Transportation/Federal Aviation Administration.
    
  Purchases of Equity Securities by the Company
 Total number of shares
    
    
    Maximum number ofpurchased as part of
    
    
    shares that may yet beTotal number of
    
    
    Average price paid
    
    
    publicly announced
    
    
    purchased under theFiscal period
    
    shares purchased
    
    
    per share
    
    
    programs
    
    
    programsMarch 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271,549Apr. 1, 2007  Apr. 28, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,271,549Apr. 29, 2007  May 26, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,271,549May 27, 2007  June 30, 2007
    
    
    950,763
    
    
    $
    46.46
    
    
    
    950,763
    
    
    
    1,320,786Total
    
    
    950,763
    
    
    $
    46.46
    
    
    
    950,763
   21




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22




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Exhibit No.
    
    Description(10)
    
    Material Contracts10.1*
    
    Amendment to Solicitation, Offer and Award Agreement (as previously
amended), dated June 8, 2007, between the United States Department of
Transportation/Federal Aviation Administration and Landstar Express America, Inc.10.2
    
    Letter Agreement, dated June 8, 2007, between Landstar System, Inc. and
Henry H. Gerkens (incorporated by reference to Exhibit 99.1 to the Registrants
Current Report on Form 8-K filed on June 11, 2007 (Commission File No. 0-21238))(31)
    
    Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002:31.1*
    
    Chief Executive Officer certification, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Chief Financial Officer certification, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.(32)
    
    Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002:32.1**
    
    Chief Executive Officer certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2**
    
    Chief Financial Officer certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith**
    
    Furnished herewith 23




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LANDSTAR SYSTEM, INC.Date: August 3, 2007
    /s/ Henry H. GerkensHenry H. GerkensPresident and
Chief Executive Officer Date: August 3, 2007
    /s/ James B. GattoniJames B. GattoniVice President and Chief
Financial Officer 24