<PAGE>

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               -----------------

                                   FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

   For the fiscal year ended December 31, 2001 or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

   For the transition period from ___________ to ___________________

   * Commission file number 000-22150

                               -----------------

                          LANDRY'S RESTAURANTS, INC.
          (Exact Name of the Registrant as Specified in Its Charter)


<TABLE>
<CAPTION>
               DELAWARE                                76-0405386
<S>                                      <C>
    (State or Other Jurisdiction of         (IRS Employer Identification No.)
    Incorporation or Organization)
         1510 WEST LOOP SOUTH
              HOUSTON, TX                                 77027
(Address of Principal Executive Offices)               (Zip Code)
</TABLE>

                                (713) 850-1010

             (Registrant's Telephone Number, Including Area Code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                    Common Stock, par value $.01 per Share
                               (Title of Class)

                               -----------------

   * Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]      No [_]

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

   The aggregate market value of the registrant's voting Common Stock held by
non-affiliates of the registrant was approximately $392,690,000 as of February
7, 2002, based on the New York Stock Exchange closing price on that date. For
this purpose, all shares held by officers and directors of the registrant are
considered to be held by affiliates, but neither the registrant nor such
persons concede that they are affiliates of the registrant.

   The number of shares outstanding of the registrant's common stock is
22,156,049 as of February 7, 2002.

                      DOCUMENTS INCORPORATED BY REFERENCE

   The Proxy Statement for the Registrant's 2002 Annual Meeting of
Stockholders, to be filed pursuant to regulation 14A under the Securities
Exchange Act of 1934, as amended, is incorporated by reference into Part III of
this Form 10-K. Although such Proxy Statement is not currently available, it
will be filed with the Securities and Exchange Commission within 120 days after
December 31, 2001.


================================================================================

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                Page No.
                                                                                                --------
<C>       <S>                                                                                   <C>
PART I.
Item 1.   Business.............................................................................     3
Item 2.   Properties...........................................................................    10
Item 3.   Legal Proceedings....................................................................    10
Item 4.   Submission of Matters to a Vote of Security Holders..................................    10

PART II.
Item 5.   Market For the Registrant's Common Stock and Related Stockholder Matters.............    11
Item 6.   Selected Financial Data..............................................................    12
Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations    13
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk...........................    18
Item 8.   Financial Statements and Supplementary Data..........................................    18
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.    18

PART III.
Item 10.  Directors and Executive Officers of the Registrant...................................    19
Item 11.  Executive Compensation...............................................................    19
Item 12.  Security Ownership of Certain Beneficial Owners and Management.......................    19
Item 13.  Certain Relationships and Related Transactions.......................................    19

PART IV.
Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................    20

SIGNATURES.....................................................................................    37

EXHIBIT INDEX..................................................................................    38

EXHIBITS.......................................................................................
</TABLE>

                                      1

<PAGE>

   In this report, we have made forward-looking statements. Our forward-looking
statements are subject to risks and uncertainty, including without limitation,
our ability to continue our expansion strategy, our ability to make projected
capital expenditures, as well as general market conditions, competition, and
pricing. Forward-looking statements include statements regarding:


  .  future capital expenditures (including the amount and nature thereof);



  .  business strategy and measures to implement that strategy;



  .  competitive strengths;



  .  goals;



  .  expansion and growth of our business and operations;



  .  plans;



  .  references to future success as well as other statements which include
     words such as "anticipate," "believe," "plan," "estimate," "expect," and
     "intend"; and


  .  other similar expressions.

   Although we believe that the assumptions underlying our forward-looking
statements are reasonable, any of the assumptions could be inaccurate and,
therefore, we cannot assure you that the forward-looking statements included in
this report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements, the inclusion of such
information should not be regarded as a representation by us or any other
person that our objectives and plans will be achieved.

                                      2

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                                    PART I

ITEM 1. BUSINESS

General

   We are principally engaged in the ownership and operation of full service,
casual dining restaurants, primarily under the names of Joe's Crab Shack,
Landry's Seafood House, The Crab House, and Rainforest Cafe. As of December 31,
2001, we were the second largest seafood restaurant chain in the United States,
and operated 191 full service restaurants including 109 Joe's Crab Shack
restaurants, 41 Landry's Seafood House division restaurants, 25 Rainforest Cafe
restaurants, 16 Crab House restaurants, and some limited menu restaurants.

   We opened the first Landry's Seafood House restaurant in 1980. In 1993, we
became a publicly held company. Our stock is listed on the New York Stock
Exchange under the symbol "LNY." In 1994, we acquired the first Joe's Crab
Shack restaurant and in 1996, acquired the Crab House chain of restaurants. We
acquired Rainforest Cafe, Inc., a publicly traded restaurant company in 2000
pursuant to a tender offer and merger. During 2001, we changed our name to
Landry's Restaurants, Inc. to reflect our expansion and broadening of
operations.

   We will continue to add to our base of restaurants, concentrating primarily
on Joe's Crab Shack restaurants. Our new restaurant expansion will primarily be
in areas where we are already located so we can take advantage of advertising
and other economies of scale, including our existing labor force.

Core Restaurant Concepts

   Joe's Crab Shack.  Joe's Crab Shack is a full-service seafood restaurant,
featuring a varied seafood menu and offering many varieties of crab
specialties. The atmosphere of a Joe's Crab Shack has an energetic casual feel,
with a fun, eclectic decor influenced by weathered, old beach front fish
shacks. Many of our Joe's Crab Shack facilities incorporate a small playground
area for children adjacent to family dining areas. Dinner entree prices range
from $7.99 to $13.99, with certain crab items available at market price. Lunch
entree prices range from $5.99 to $8.99. During the year ended December 31,
2001, alcoholic beverage sales accounted for approximately 15% of the concept's
total restaurant revenues.

   Landry's Seafood House.  Landry's Seafood House is a full-service
traditional Gulf Coast seafood restaurant. It offers an extensive menu
featuring fresh fish, shrimp, crab, lobster, scallops, other seafood, beef and
chicken specialties in a comfortable, casual atmosphere. The restaurants
feature a prototype look that is readily identified by a large theater-style
marquee over the entrance and by a distinctive brick and wood facade, creating
the feeling of a traditional old seafood house restaurant. Dinner entree prices
range from $12.99 to $20.99, with certain items offered at market price. Lunch
entrees range from $5.99 to $9.99. During the year ended December 31, 2001,
alcoholic beverage sales accounted for approximately 16% of the concept's total
restaurant revenues.

   Rainforest Cafe.  The Rainforest Cafe restaurants provide full service
casual dining in a visually and audibly stimulating and entertaining rainforest
environment that appeals to a broad range of customers. Each Rainforest Cafe
consists of a restaurant and a retail village. The restaurant provides an
attractive value to customers by offering a full menu of high quality food and
beverage items served in a simulated rainforest, complete with thunderstorms,
waterfalls and an active wildlife. In the retail village, Rainforest Cafe,
sells complementary apparel, toys, and gifts with the Rainforest Cafe logo in
addition to other items reflecting the rainforest theme. Dinner entree prices
range from $10.99 to $18.99. Lunch entree prices range from $7.99 to $9.99.
During the year ended December 31, 2001, retail sales and alcoholic beverage
sales accounted for approximately 24% of the concept's total restaurant
revenues.

   The Crab House.  The Crab House restaurant is a full service casual dining
seafood specialty restaurant with a casual nautical theme. Many of The Crab
House restaurants feature a fresh seafood salad bar. Dinner entree prices range
from $13.99 to $18.99, with certain items offered at market price. Lunch
entrees range from $6.99 to $9.99. During the year ended December 31, 2001,
alcoholic beverage sales accounted for approximately 14% of the concept's total
restaurant revenues.

                                      3

<PAGE>

   Kemah Boardwalk and the Aquarium.  Kemah Boardwalk is an approximately
30-acre entertainment complex that features seven of our restaurants, retail
shops, a hotel, amusement rides and a marina and is the home of our initial
aquarium theme restaurant named The Aquarium--An Underwater Dining Adventure.
The Aquarium restaurant offers seafood dining in an extraordinary setting.
Guests dine amongst fish and coral with the illusion of being at the bottom of
the sea and are seated around a large centerpiece aquarium and numerous smaller
aquariums with decor and lighting that complement the overall dining
experience. As of December 31, 2001, there was one Aquarium restaurant located
at our Kemah Boardwalk development.

Strategy

   Our objective is to develop and operate a nationwide system of restaurants
that offer customers a fun dining experience, create a loyal customer base that
generates a high level of repeat business and provide superior returns to our
investors. By focusing on the food, value, service, and ambiance of a
restaurant, we strive to create an environment that fosters repeat patronage
and encourages word-of-mouth recommendations. Our operating strategy focuses on
the following:

  .  Commitment to providing attractive price value relationship.  Our
     restaurants provide customers an attractive price-value relationship by
     serving generous portions with fresh ingredients in high quality meals at
     moderate prices.

  .  Commitment to customer satisfaction.  We provide our customers prompt,
     friendly and efficient service, keeping table-to-wait staff ratios low,
     and staffing each restaurant with an experienced management team to ensure
     attentive customer service and consistent food quality.

  .  Distinctive design and decor and casual atmosphere.  Each of our
     restaurant concepts has a distinctive appearance and a flexible design,
     which can accommodate a wide variety of available sites. We strive to
     create a memorable dining experience for customers to ensure repeat and
     frequent patronage.

  .  High profile locations for restaurants.  We locate a substantial number of
     our restaurants in markets, which provide a balanced mix of tourist,
     convention, business, and residential clientele. We believe that this
     strategy results in a high volume of new and repeat customers and provides
     us with increased name recognition in new markets.

  .  Commitment to attracting and retaining quality employees.  We believe
     there is a high correlation between the quality of restaurant management
     and the long-term success of the restaurant. We provide extensive training
     and attractive compensation as well as promote internally to foster a
     strong corporate culture and encourage a sense of personal commitment from
     our employees. With our cash bonus program, our managers typically earn
     bonuses equal to 15% to 25% of their total cash compensation.

     We believe we have demonstrated the viability of our restaurant concepts
     in a wide variety of markets across the US. We intend to continue our
     expansion program through internal growth and acquisitions.

  .  Expansion of our core restaurant concepts.  We anticipate continued
     expansion of our core restaurant concepts by opening additional units in
     existing markets that provide us economic and operating efficiencies and
     the ability to leverage our operating expertise. We intend to concentrate
     on development of Joe's Crab Shack restaurants in existing markets to
     increase our competitive position and obtain greater marketing and
     operational efficiencies. The specific rate at which we are able to open
     new restaurants will be determined by our success in locating satisfactory
     sites, negotiating acceptable lease or purchase terms and securing
     appropriate local governmental permits and approvals, and by our ability
     to supervise construction and recruit and train management personnel.

  .  Testing new concepts and clustering our restaurants around
     attractions.  We can offer an array of restaurant choices as well as other
     entertainment that appeals to different tastes and budgets. We will also
     explore internally developed concepts such as the Kemah Boardwalk and the
     Aquarium.

  .  Pursuit of growth through acquisitions.  Acquisitions have contributed
     significantly to our growth and will continue to play a substantial role
     in our growth strategy. We have a history of acquisitions, including Joe's
     Crab Shack in 1994, the Crab House in 1996 and the Rainforest Cafe in
     2000. We will continue to pursue opportunistic purchases of, or
     investments in, other restaurant companies and in the hospitality,
     amusements, entertainment, food service, facilities management or other
     related industries.

                                      4

<PAGE>

Recent and Planned Growth


   We anticipate continued expansion of our core restaurant concepts by opening
units in existing and other desirable markets, which provides us economic and
operating efficiencies and the ability to leverage our operating expertise. In
addition, we may pursue opportunistic purchases of other restaurant companies
and investments in the hospitality, entertainment, food service, facilities
management or other industries.


   We completed the acquisition of Rainforest Cafe in December 2000. Our
strategy for the Rainforest Cafe restaurants includes:


  .  improved menus;



  .  an increased operational focus;



  .  new manager incentive programs for employee retention and revenue
     improvement; and


  .  new advertising and marketing campaigns.


   We successfully implemented similar changes in the Joe's Crab Shack
restaurants in 1999. The initial growth strategy of Rainforest Cafe, which was
pursued by predecessor management, included the development of Rainforest Cafe
restaurants in both high-profile concentrated tourist areas, and in shopping
center mall locations. Most of the mall locations have experienced high initial
revenues followed by prolonged revenue declines, although these mall locations
generate revenues significantly greater than typical casual dining restaurants.



   We opened 13 restaurants in 2000. However, as a result of the Rainforest
Cafe acquisition which added 25 high volume restaurants, we reduced new
openings in 2001 to eight restaurants. Now that the integration of the
Rainforest Cafe restaurants has been completed, we have increased our planned
2002 unit openings to approximately 20. These are expected to be primarily new
Joe's Crab Shack restaurants.


   Our primary growth will utilize the Joe's Crab Shack concept, although
additional Landry's Seafood House, The Crab House and Rainforest Cafe
restaurants may be built. We believe that the increased consumption of seafood
due to its taste, variety and perceived health advantages, combined with the
excellent unit economics of our restaurants, support our decision to
concentrate our expansion efforts on quality seafood restaurants in
strategically targeted markets.

   We internally developed a new restaurant concept called "The Aquarium--An
Underwater Dining Adventure." The Aquarium restaurant offers seafood dining in
an extraordinary setting. Guests dine amongst fish and coral with the illusion
of being at the bottom of the sea. Guests are seated around a large centerpiece
aquarium and numerous smaller aquariums with decor and lighting that complement
the overall dining experience. As of December 31, 2001, there was one Aquarium
restaurant located at our Kemah Boardwalk development. We entered into a
long-term lease agreement with the City of Houston to develop a second Aquarium
restaurant, along with a public exhibit, and complementary amusements and
entertainment facilities on city-owned property.

   The Kemah Boardwalk development represented our first attempt at clustering
a number of our restaurants together with amusements, hotel facilities and
shops to attract families, tourists, businessmen and others to a single
destination location. We intend to capitalize on other opportunities to develop
further destination facilities in other strategic locations. In addition, we
have expanded our operations to include hotel management and convention center
development, construction and operation.

                                      5

<PAGE>

   A designated team of our employees are responsible for opening new
restaurant locations, including kitchen personnel and other individuals who are
trained as hosts, waiters, floor managers and bartenders. Our enhanced
management-training program allows assistant general managers to be promoted to
general managers. We believe that this program lowers our turnover rates at the
general manager level. We believe that through our training program and the
hiring of outside personnel we will be able to support our expansion strategy.

Restaurant Locations

   Our seafood restaurants generally range in size from 5,000 square feet to
16,000 square feet, with an average restaurant size of approximately 8,000
square feet. The restaurants generally have dining room floor seating for
approximately 215 customers, patio seating on a seasonal basis, and bar seating
for approximately 10 to 20 additional customers.

   The Rainforest Cafe restaurants generally range in size from approximately
15,000 to 30,000 square feet with an average restaurant size of approximately
20,000 square feet. The Rainforest Cafe restaurants have between 300 and 600
restaurants seats with an average of approximately 400 seats.

   The following table enumerates by state the location of our restaurants as
of December 31, 2001:


<TABLE>
<CAPTION>
                                          Number                   Number
      State                              of Units State           of Units
      -----                              -------- -----           --------
      <S>                                <C>      <C>             <C>
      Alabama...........................     3    Mississippi....     1
      Arizona...........................     5    Missouri.......     3
      California........................    11    Nevada.........     5
      Colorado..........................     7    New Jersey.....     3
      Connecticut.......................     1    New Mexico.....     1
      Florida...........................    22    North Carolina.     4
      Georgia...........................     5    Ohio...........     8
      Illinois..........................     9    Oklahoma.......     2
      Indiana...........................     5    South Carolina.     7
      Kansas............................     2    Tennessee......     6
      Kentucky..........................     2    Texas..........    56
      Louisiana.........................     4    Utah...........     1
      Maryland..........................     2    Virginia.......     5
      Massachusetts.....................     1    Washington.....     1
      Michigan..........................     5    Toronto, Canada     1
                                                                    ---
      Minnesota.........................     3    Total..........   191
                                                                    ===
</TABLE>


   We are also the developer and operator of the Kemah Boardwalk located south
of Houston, Texas. We own and operate substantially all of the 30 acre Kemah
Boardwalk development, which includes seven restaurants (included in the table
above), a hotel, retail shops, amusement attractions, and a marina.


Menu

   Our seafood restaurants offer a wide variety of high quality, broiled,
grilled, and fried seafood items at moderate prices, including red snapper,
shrimp, crawfish, crab, lump crabmeat, lobster, oysters, scallops, flounder,
and other traditional seafood items, many with a choice of unique seasonings,
stuffings and toppings.

                                      6

<PAGE>

Menus include a wide variety of seafood appetizers, salads, soups and side
dishes. We provide high quality beef, fowl, pastas, and other American food
entrees as alternatives to seafood items. Our restaurants also feature a unique
selection of desserts made fresh on a daily basis at each location. Many of our
restaurants offer complimentary salad and garlic bread with each entree, as
well as certain lunch specials and popularly priced children's entrees. The
Rainforest Cafe menu offers traditional American fare, including beef, chicken
and seafood at moderate prices.

Management and Employees

   We staff our restaurants with management that has experience in the
restaurant industry. We believe our strong team-oriented culture helps us
attract highly motivated employees who provide customers with a superior level
of service. We train our kitchen employees and wait staff to take great pride
in preparing and serving food in accordance with our high standards. Restaurant
managers and staff are trained to be courteous and attentive to customer needs,
and the managers, in particular, are instructed to visit each table. Senior
corporate management hosts weekly meetings with restaurant general managers to
discuss individual restaurant performance and customer comments. Moreover, we
require general managers to hold weekly staff meetings at their individual
restaurants. We monitor compliance with our quality requirements through
periodic on-site visits and formal periodic inspections by regional field
managers and supervisory personnel from our corporate offices.

   Our typical seafood unit has a general manager and several kitchen and floor
managers. We have internally promoted many of the general managers after
training them in all areas of restaurant management with a strong emphasis on
kitchen operations. The general managers generally spend most of their time in
the dining area of the restaurant, supervising the staff and providing service
to customers.


   The Rainforest Cafe unit management structure is more complex due to higher
unit level sales, larger facilities, rainforest theming including animatronics,
aquariums, and complementary retail business activity. A management team
consisting of floor, kitchen, retail, facility and outside sales managers
supports the general manager.


   Each restaurant management team is eligible to receive monthly incentive
bonuses. These employees typically earn between 15% and 25% of their total cash
compensation under this program.

   We have spent considerable effort in developing employee growth programs
whereby a large number of promotions occur internally. We require each trainee
to participate in a formal training program that utilizes departmental training
manuals, examinations and a scheduled evaluation process. We require newly
hired wait staff to spend from five to ten days in training before they serve
our customers. We utilize a program of extensive background checks for
prospective management employees, such as criminal checks, credit checks,
driving record and drug screening. Management training encompasses three
general areas:

  .  all service positions;

  .  management accounting, personnel management, and dining room and bar
     operations; and

  .  kitchen management, which entails food preparation and quality controls,
     cost controls, training, ordering and receiving, and sanitation operations.

   Due to our enhanced training program, management training customarily lasts
approximately 8 to 12 weeks, depending upon the trainee's prior experience and
performance relative to our objectives. As we expand, we will need to hire
additional management personnel, and our continued success will depend in large
part on our ability to attract, train, and retain quality management employees.
As a result of the enhanced training programs, we attract and retain a greater
proportion of management personnel through our existing base of employees and
internal promotions and advancements.

                                      7

<PAGE>

   As of December 31, 2001, there were approximately 70 individuals involved in
regional management functions. As we grow, we plan to increase the number of
regional managers, and to have each regional manager responsible for a limited
number of restaurants within their geographic area. We plan to promote
experienced restaurant level management personnel to serve as future regional
managers.

   As of December 31, 2001, we employed approximately 15,400 persons, of whom
1,175 were restaurant managers or manager-trainees, 315 were salaried corporate
and administrative employees, approximately 70 were operations regional
management employees, 65 were development and construction employees and the
rest were hourly employees (all numbers approximate). Typical restaurant
employment for us is at a seasonal low at December 31, 2001. Each of our
seafood restaurants employ an average of approximately 60 to 100 people,
depending on seasonal needs. The largest Rainforest Cafe units have in excess
of 400 employees. We believe that our management level employee turnover for
2001 was within industry standards. None of our employees are covered by a
collective bargaining agreement. We consider our relationship with employees to
be satisfactory.

Customer Satisfaction

   We provide our customers prompt, friendly and efficient service by keeping
table-to-wait staff ratios low and staffing each restaurant with an experienced
management team to ensure attentive customer service and consistently high food
quality. Through the use of comment cards and a 1-800-telephone number, senior
management receives valuable feedback from customers and demonstrates a
continuing interest in customer satisfaction by responding promptly.

Purchasing

   We strive to obtain consistent, quality items at competitive prices from
reliable sources. We continually search for and test various products in order
to serve the highest quality products possible and to be responsive to changing
customer tastes. In order to maximize operating efficiencies and to provide the
freshest ingredients for our food products, while obtaining the lowest possible
prices for the required quality, each restaurant's management team determines
the daily quantities of food items needed and orders such quantities from major
suppliers at prices negotiated primarily by our corporate office. We emphasize
availability of the items on our menu, and if an item is in short supply,
restaurant level management is expected to procure the item immediately.

   We use many suppliers and obtain our seafood products from global sources in
order to ensure a consistent supply of high-quality food and supplies at
competitive prices. While the supply of certain seafood species is volatile, we
believe that we have the ability to identify alternative seafood products and
to adjust our menus as required. We routinely inventory bulk purchases of
seafood products and retail goods for distribution to our restaurants to take
advantage of buying opportunities and hedge against price and supply
fluctuations.

   We believe that the essential food products and retail goods are available,
or can be made available upon relatively short notice, from alternative
qualified suppliers. We use two national distributors in order to achieve
certain cost efficiencies, but such services are available from alternative
qualified distributors. We have not experienced any significant delays in
receiving our food and beverage products, restaurant supplies or equipment.

Advertising and Marketing

   We employ a marketing strategy to attract new customers, to increase the
frequency of visits by existing customers, and to establish a high level of
name recognition. We have historically relied primarily on word-of- mouth
publicity, billboards with distinctive graphics, travel and hospitality
magazines and print advertising. Since 1999, we successfully expanded our use
of television and radio commercials. We use multiple billboards on highways to
direct potential customers from the highways to the restaurants, as well as to
build name recognition within each market. Our advertising expenditures for
2001 were approximately 2.7% of revenues. We anticipate that advertising and
marketing expenses will increase as a percentage of revenues and that we will
utilize more television and radio advertising.

                                      8

<PAGE>

Restaurant Security

   We take precautions to protect individual restaurant locations against
theft, robbery and other breaches of security through security procedures and
alarm and surveillance systems. As a component of our emphasis on restaurant
security, we employ a licensed peace officer as Director of Security. Our
Director of Security, who reports directly to the corporate office, provides
consultation and supervision relating to theft prevention, employee related
security issues and restaurant facility protection.

Service Marks

   Landry's Seafood House, Joe's Crab Shack and Rainforest Cafe are each
registered as a federal service mark on the Principal Register of the United
States Patent and Trademark Office. The Crab House is a registered design mark.
We pursue registration of our important service marks and trademarks and
vigorously oppose any infringement upon them.

Competition

   The restaurant industry is intensely competitive with respect to price,
service, the type and quality of food offered, location and other factors. We
have many well-established competitors with substantially greater financial
resources and a longer history of operations. We compete with both locally
owned restaurants, as well as national and regional restaurant chains, some of
which may be better established in our existing and future markets. In
particular, Red Lobster, a national seafood restaurant chain, operates over 600
seafood restaurants nationwide, many of which operate in our existing and
future markets. We also compete with other restaurant and retail establishments
for sites.

   Changes in customer tastes, economic conditions, demographic trends and the
location, number of, and type of food served by competing restaurants could
adversely affect our business as could a shortage of experienced management and
hourly employees. We believe our restaurants enjoy a high level of repeat
business and customer loyalty due to high food quality, good perceived
price-value relationship, comfortable atmosphere, and friendly efficient
service.

Rainforest International License and Joint Venture Agreements

   Rainforest Cafe has seven separate exclusive license arrangements relating
to the operations and development of Rainforest Cafes in the United Kingdom,
Japan, France, Mexico, Canada and certain countries and cities in Asia. These
agreements include a per unit development fee and royalties ranging from 3% to
7% of sales. There are 11 international units in operation. Two of the
franchised international units were opened during 2001. We own various equity
interests in several of the international locations. Some of the international
franchised locations are experiencing sales declines. We do not anticipate
revenues from international franchises to be significant.

Information as to Classes of Similar Products or Services

   We operate in only one industry segment. All significant revenues and
pre-tax earnings relate to retail sales of food, beverages and merchandise to
the general public through company-owned and company-operated restaurants,
substantially all located in the United States.

                                      9

<PAGE>

ITEM 2. PROPERTIES

Restaurant Locations

   For information concerning the location of our restaurants see
"Business--Restaurant Locations."

   During 2001, we completed construction of our new corporate office in
Houston, Texas. Our new headquarters is a multi-story building owned by us and
includes meeting and training facilities, and a research and development test
kitchen. We also own and operate approximately 75,000 square feet of warehouse
facilities used primarily for construction activities and related storage and
retail goods storage and distribution related activities.

ITEM 3. LEGAL PROCEEDINGS

Dissenters Rights Litigation

   Eighty-one former shareholders (holding 4,406,655 shares) of Rainforest Cafe
common stock dissented to the merger between us and Rainforest Cafe. On
February 13, 2001, Rainforest Cafe sent each of the 81 dissenting shareholders,
Rainforest Cafe's estimate of fair value per share, along with a check in the
amount of $3.25 per share, which was the original acquisition price.
Subsequently, 78 of the dissenting shareholders have made a demand for
supplemental payment based on their belief that the fair value of each share of
common stock in the former Rainforest Cafe was greater than $3.25 per share. We
believe that our estimate of fair value is correct, and that the dissenting
shareholders' estimate of fair value is significantly inflated. We will
vigorously pursue our determination of fair value in an appraisal proceeding.

Class Action Litigation


   Class action lawsuits were filed in June and July of 1999 against us in the
United States District Court for the Southern District of Texas, Houston
Division. These actions name us as defendants along with all of our current
executive officers, directors and underwriters that participated in our
offering of common stock in March 1998. Such lawsuits allege that the
defendants violated Federal securities laws during certain periods while
individually selling our common stock. The plaintiffs in these actions seek
unspecified monetary damages. Although the ultimate outcome of this matter
cannot be determined at this time, we believe these claims are without merit
and intend to defend these claims vigorously. The parties to these lawsuits
have reached a settlement, subject to judicial review and other procedural
matters before it becomes final.


General Litigation

   We are subject to other legal proceedings and claims that arise in the
ordinary course of business. We do not believe that the outcome of any of those
matters will have a material adverse effect on our financial position, results
of operations or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   We did not submit any matters to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2001.

                                      10

<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
 MATTERS

Price Range of Common Stock

   Our common stock trades on the New York Stock Exchange under the symbol
"LNY." As of February 7, 2002, there were approximately 1,120 stockholders of
record of the common stock.

   The table below sets forth, for the periods indicated, the high and low sale
prices as reported on the New York Stock Exchange.

<TABLE>
<CAPTION>
                                                              High   Low
                                                             ------ ------
      <S>                                                    <C>    <C>
      2000
         First Quarter...................................... $10.19 $ 6.06
         Second Quarter.....................................   8.75   6.13
         Third Quarter......................................   8.50   6.75
         Fourth Quarter.....................................  10.63   6.69
      2001
         First Quarter...................................... $12.80 $ 9.32
         Second Quarter.....................................  17.25  10.75
         Third Quarter......................................  20.54  11.82
         Fourth Quarter.....................................  21.38  13.64
</TABLE>

Dividend Policy


   Commencing in 2000, we began to pay an annual $0.10 per share dividend,
declared and paid in quarterly installments of $0.025 per share. The actual
declaration and payment of cash dividends depends upon our actual earnings
levels, capital requirements, financial condition, and other factors deemed
relevant by the board of directors.


Stock Repurchase

   In November 1998, we announced the authorization of an open market stock buy
back program. In April 2000, we authorized a renewal of our stock buy back
program for $36.0 million. These programs have resulted in our aggregate
repurchasing of approximately 9.8 million shares of common stock for
approximately $78.8 million through December 31, 2001.

                                      11

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

   The following table contains selected consolidated financial data for each
of the past five fiscal years. All numbers are in thousands, except per share
data:

                  SELECTED CONSOLIDATED FINANCIAL INFORMATION


<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                            ------------------------------------------------------------
                                                              2001         2000         1999         1998         1997
-                                                           --------     --------     --------     --------     --------
<S>                                                         <C>          <C>          <C>          <C>          <C>
INCOME STATEMENT DATA
Revenues................................................... $746,642     $520,980     $438,986     $399,548     $311,673
Operating costs and expenses:
   Cost of revenues........................................  219,684      156,787      136,321      121,082       95,639
   Restaurant labor........................................  215,662      147,192      125,566      107,976       80,837
   Other restaurant operating expenses.....................  185,186      122,099      101,563       86,319       66,227
   General and administrative expenses.....................   38,004       26,652       21,354       15,222       10,517
   Depreciation and amortization...........................   37,147 (1)   33,392 (1)   22,230       18,687       17,080
   Restaurant pre-opening expenses.........................    2,598        3,402        3,764       10,439 (2)       --
   Store closings and special charges......................       --        2,000 (3)    2,945 (3)   37,632 (3)       --
                                                            --------     --------     --------     --------     --------
      Total operating costs and expenses...................  698,281      491,524      413,743      397,357      270,300
Operating income...........................................   48,361       29,456       25,243        2,191       41,373
Other (income) expense:
   Interest (income) expense, net..........................    9,402        6,618        1,965       (1,625)      (1,063)
   Other, net..............................................      (56)         887         (178)        (843)        (394)
                                                            --------     --------     --------     --------     --------
      Total other (income) expense.........................    9,346        7,504        1,787       (2,468)      (1,457)
Income before income taxes & cumulative effect of
 accounting change.........................................   39,015       21,952       23,456        4,659       42,830
Provision for income taxes.................................   12,095        7,302        8,080        1,607       15,400
                                                            --------     --------     --------     --------     --------
Income before cumulative effect of accounting change.......   26,920       14,650       15,376        3,052       27,430
Cumulative effect of accounting change, net of tax.........       --           --           --        3,382 (2)       --
                                                            --------     --------     --------     --------     --------
Net income (loss).......................................... $ 26,920     $ 14,650     $ 15,376     $   (330)    $ 27,430
Net income before special charges, merger costs and
 accounting change......................................... $ 26,920     $ 20,301     $ 17,305     $ 27,701     $ 27,430
                                                            ========     ========     ========     ========     ========
Earnings (loss) per share information:
Basic
  Net income before cumulative effect of accounting change. $   1.24     $   0.63     $   0.58     $   0.10     $   1.07
    Cumulative effect of accounting change, net of tax.....       --           --           --        (0.11)          --
                                                            --------     --------     --------     --------     --------
    Net income (loss)...................................... $   1.24     $   0.63     $   0.58     $  (0.01)    $   1.07
                                                            ========     ========     ========     ========     ========
  Net income before special charges, merger costs and
   accounting change....................................... $   1.24     $   0.87     $   0.65     $   0.94     $   1.07
                                                            ========     ========     ========     ========     ========
    Weighted average number of common shares outstanding...   21,750       23,400       26,675       29,400       25,518
Diluted
  Net income before cumulative effect of accounting change. $   1.19     $   0.62     $   0.57     $   0.10     $   1.03
  Cumulative effect of accounting change, net of tax.......       --           --           --        (0.11)          --
                                                            --------     --------     --------     --------     --------
   Net income (loss)....................................... $   1.19     $   0.62     $   0.57     $  (0.01)    $   1.03
  Net income before special charges, merger costs and
   accounting change....................................... $   1.19     $   0.86     $   0.64     $   0.93     $   1.03
                                                            ========     ========     ========     ========     ========
    Weighted average number of common shares and
     common share equivalents outstanding..................   22,535       23,600       27,025       29,900       26,600
BALANCE SHEET DATA (AT END OF PERIOD)
Working capital............................................ $ (6,017)    $(39,657)(4) $ 17,430     $ 43,960     $ 35,058
Total assets...............................................  690,171      663,875      496,726      489,949      382,281
Short-term notes payable and current portion of long-term
 notes and other obligations...............................       --           60           93           82           72
Long-term notes and other obligations, noncurrent..........  175,000      155,000       68,060       35,153       50,235
Stockholders' equity....................................... $393,671     $364,553     $377,348     $408,672     $296,738
</TABLE>




                                      12

<PAGE>

--------
1) In December 2001 and 2000, we recorded an asset impairment charge of $2.4
   million ($1.6 million after tax) and $6.3 million ($4.3 million after tax)
   related to the write-down to estimated fair value of certain restaurant
   properties.
(2) During 1998, we adopted Statement of Position 98-5 "Reporting on the Costs
    of Start-Up Activities", requiring the expensing of pre-opening costs as
    incurred. Additionally, pre-opening costs capitalized at December 31, 1997,
    were required to be expensed effective January 1, 1998, as a cumulative
    effect of a change in accounting principle.

(3) In the second quarter of 2000, we recorded a $2.0 million special charge to
    expense merger costs for our initial offer to acquire Rainforest Cafe. We
    incurred $2.9 million in store closings and special charges during 1999.
    The charges were the net result of $3.7 million in transaction costs as the
    result of a terminated merger agreement during the first quarter of 1999,
    and the reversal of an accrual (income) of $0.7 million related to
    favorably settling lease terminations during the second quarter of 1999. We
    incurred $37.6 million in store closings and special charges in the fourth
    quarter of 1998. These charges provided an estimated income tax benefit of
    $13.0 million. These charges were the result of our decision during the
    fourth quarter of 1998 to close eleven underperforming restaurants and
    changes in our strategic growth plan.

(4) Amount includes accrued costs of $44.4 million attributable to our
    acquisition of Rainforest Cafe.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

Introduction

   We own and operate full-service, casual dining restaurants. As of December
31, 2001, we operated 191 restaurants.


   In 2000, pursuant to a tender offer and follow-up merger, we acquired the
Rainforest Cafe, a publicly traded restaurant company. The aggregate purchase
price for all outstanding shares was approximately $70 million. As of December
31, 2001, we owned and operated 24 domestic and one international Rainforest
Cafe restaurants and franchised 11 international units. We own a minority
equity interest in certain international franchised units. Subsequent to the
acquisition, we closed five domestic Rainforest Cafe restaurants. We will
potentially close additional Rainforest Cafe restaurants failing to meet
certain minimum standards.



   Revenues for many of the acquired Rainforest Cafe restaurants have
experienced same store sales declines for an extended period of time prior to
our ownership. Correspondingly, comparative restaurant profitability has also
declined. We have implemented numerous changes to address the sales declines
through:


  .  improved menu development;

  .  a focused general manager incentive plan;

  .  additional investments in improved ambiance;

  .  additional marketing initiatives; and

  .  selective unit closures of restaurants that do not meet our minimum
     standards.

   We cannot assure you that we will successfully curtail the same store sales
declines of Rainforest Cafe restaurants or that our operational and financial
plans will improve operating margins, particularly in situations where sales
declines continue.

   As a result of the terrorist attacks on the United States on September 11,
2001, a number of our restaurants were negatively affected. Our Rainforest
Cafes and other restaurants in major tourist areas saw an immediate decline in
same-store sales as customers initially curtailed their travel and dining out
activities. These revenue

                                      13

<PAGE>

declines began to lessen in the fourth quarter, as people appeared to be
adjusting to the change in airline travel schedules, security and safety.
However, we cannot predict at this time what lingering effects the terrorists'
attack will have on our business. Such affects could be seen in our revenue,
liquidity and ability to access the capital markets.

   Changes in federal and state taxes and other federal and state governmental
policies and regulations could also impact our operations, including possible
changes such as:

  .  increases in the level of minimum wage;

  .  decreases in the deductibility of business and entertainment expenses; and

  .  changes in government policy affecting levels of disposable income or
     national and regional economic growth policies.

At present, there are various federal, state and local governmental initiatives
to increase the level of minimum wages, which would increase our labor costs.

   The restaurant industry is intensely competitive and is affected by changes
in consumer tastes and by national, regional, and local economic conditions and
demographic trends. The performance of individual restaurants may be affected
by factors such as:

  .  traffic patterns;

  .  demographic considerations;

  .  weather conditions; and

  .  the type, number, and location of competing restaurants.

   We have many well established competitors with greater financial resources
and longer histories of operation than ours, including competitors already
established in regions where we are planning to expand, as well as competitors
planning to expand in the same regions. We face significant competition from
mid-priced, full-service, casual dining restaurants offering seafood and other
types and varieties of cuisine. Our competitors include national, regional, and
local chains as well as local owner-operated restaurants. We also compete with
other restaurants and retail establishments for restaurant sites. We intend to
pursue an acquisition strategy.

Results of Operations

  Restaurant Profitability

   The following table sets forth the percentage relationship to total
restaurant revenues of certain restaurant operating data for the periods
indicated:


<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                                  ----------------------
                                                   2001      2000   1999
                                                   -----     -----  -----
          <S>                                     <C>       <C>    <C>
          Revenues............................... 100.0%    100.0% 100.0%
          Cost of revenues.......................  29.4      30.1   31.1
          Restaurant labor.......................  28.9      28.3   28.6
          Other restaurant operating expenses (1)  24.8      23.4   23.1
                                                  -----     -----  -----
          Restaurant level profit (1)............  16.9%     18.2%  17.2%
                                                  =====     =====  =====
</TABLE>
--------
(1) Excludes depreciation, amortization and pre-opening expenses.

  Year Ended December 31, 2001 Compared to the Year Ended December 31, 2000

   Revenues increased $225,662,491, or 43.3%, from $520,979,796 to $746,642,287
for the year ended December 31, 2001, compared to the year ended December 31,
2000. Revenues from new restaurant openings, a same store sales increase of
2.2%, and the inclusion of revenues from Rainforest Cafe restaurants for the
full year primarily attributed to the increase in revenues.

                                      14

<PAGE>

   As a primary result of increased revenues, cost of revenues increased
$62,896,773, or 40.1%, from $156,786,917 to $219,683,690 in the year ended
December 31, 2001, compared to the prior year. Cost of revenues as a percentage
of revenues for the year ended December 31, 2001 decreased to 29.4% from 30.1%
in 2000. The decrease in cost of revenues as a percentage of revenues primarily
reflects the inclusion of Rainforest Cafe restaurants with lower cost of
revenues percentages, menu changes and lower product costs in 2001 as compared
to 2000.

   Restaurant labor expenses increased $68,469,605, or 46.5%, from $147,192,415
to $215,662,020 in the year ended December 31, 2001, compared to the prior
year. Restaurant labor expenses as a percentage of revenues for the year ended
December 31, 2001 increased to 28.9% from 28.3% in 2000. The inclusion of
Rainforest Cafe units, which generally incur higher labor costs, and large
initial staffing and training costs incurred following the opening of the
Rainforest Cafe restaurant in Anaheim, California primarily caused the increase
in labor expense as a percentage of revenues.


   Other restaurant operating expenses increased $63,087,473, or 51.7%, from
$122,098,633 to $185,186,106 in the year ended December 31, 2001, compared to
the prior year, principally as a result of increased revenues. Such expenses
increased as a percentage of revenues to 24.8% in 2001 from 23.4% in 2000, as a
primary result of the inclusion of Rainforest Cafe restaurants with higher
occupancy expenses, and slight percentage increases in advertising and utility
costs. We anticipate advertising and marketing expenses may increase as a
percentage of revenues in 2002.


   General and administrative expenses increased $11,351,042, or 42.6%, from
$26,652,446 to $38,003,488 in the year ended December 31, 2001, compared to the
prior year, and remained flat as a percentage of revenues at 5.1%. The dollar
increase resulted primarily from increased personnel to support the Rainforest
Cafe restaurants. We expect that the future rate of increase of general and
administrative expenses will moderate in comparison to revenue increases.

   Depreciation and amortization expense increased $3,755,537, or 11.2%, from
$33,391,788 to $37,147,325 in the year ended December 31, 2001, compared to the
prior year. The increase was primarily due to the addition of new restaurants
and equipment and the inclusion of the Rainforest Cafe restaurants for 2001.


   The increase in net interest expense for the year ended December 31, 2001,
as compared to the prior year, is substantially due to increased borrowings for
treasury stock repurchases and the Rainforest Cafe acquisition. Our average
borrowing rate declined by approximately 4 percentage points from December 31,
2000 to December 31, 2001. The change in other expense (income), net was not
deemed material.


   Provision for income taxes increased by $4,793,902 to $12,095,730 in 2001
from $7,301,828 in 2000 primarily due to changes in our pre-tax income. The
provision for income taxes as a percentage of income before income taxes was
reduced in the third and fourth quarter of 2000 and prospectively from 34.5% to
31% to reflect continuing favorable federal tax credits for tipped employees.

  Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999

   Revenues increased $81,993,553, or 18.7%, from $438,986,243 to $520,979,796
for the year ended December 31, 2000, compared to the year ended December 31,
1999. Revenues from new restaurant openings, a same store sales increase of 1%,
and the inclusion of revenues from Rainforest Cafe restaurants for the last two
months of 2000 primarily attributed to the increase in revenues.

   As a primary result of increased revenues, cost of revenues increased
$20,465,886, or 15.0%, from $136,321,031 to $156,786,917 in the year ended
December 31, 2000, compared to the prior year. Cost of revenues as a percentage
of revenues for the year ended December 31, 2000 decreased to 30.1% from 31.1%
in 1999. The decrease in cost of revenues as a percentage of revenues primarily
reflects menu changes and lower product costs in 2000 as compared to 1999.

                                      15

<PAGE>

   Restaurant labor expenses increased $21,626,074, or 17.2%, from $125,566,341
to $147,192,415 in the year ended December 31, 2000, compared to the prior
year. Restaurant labor expenses as a percentage of revenues for the year ended
December 31, 2000 decreased to 28.3% from 28.6% in 1999. The decrease reflects
productivity improvements partially offset by labor rate increases.

   Other restaurant operating expenses increased $20,535,746, or 20.2%, from
$101,562,887 to $122,098,633 in the year ended December 31, 2000, compared to
the prior year, principally as a result of increased revenues. Such expenses
increased as a percentage of revenues to 23.4% in 2000 from 23.1% in 1999, as a
primary result of increased occupancy and utility costs.


   General and administrative expenses increased $5,298,836, or 24.8%, from
$21,353,610 to $26,652,446 in the year ended December 31, 2000, compared to the
prior year, and increased as a percentage of revenues to 5.1% from 4.9%. The
dollar increase resulted primarily from increased personnel to support our
operations and increased incentive bonus compensation and duplicate corporate
overhead costs for November and December 2000 associated with Rainforest Cafe
corporate headquarters in Minneapolis, Minnesota.


   Depreciation and amortization expense increased $11,162,026, or 50.2%, from
$22,229,762 to $33,391,788 in the year ended December 31, 2000, compared to the
prior year. The dollar increase was primarily due to an asset impairment charge
of $6,291,706, and the addition of new restaurants and equipment.

   The increase in net interest expense for the year ended December 31, 2000,
as compared to the prior year, is substantially due to increased borrowings
from treasury stock repurchases and the Rainforest Cafe acquisition. The
decrease in other expense (income), net was attributable to an involuntary gain
recorded in 1999, which did not recur in 2000.

   Provision for income taxes decreased by $778,404 to $7,301,828 in 2000 from
$8,080,232 in 1999 primarily due to the higher interest expense and a reduction
in our income. The provision for income taxes as a percentage of income before
income taxes was reduced in the third and fourth quarter of 2000 and
prospectively from 34.5% to 31% to reflect continuing favorable federal tax
credits for tipped employees.

   For the year ended December 31, 2000, we incurred a special charge of
$2,000,000 ($1,310,000, net of tax) in connection with the termination of an
initial attempted acquisition of Rainforest Cafe. Store closings and special
charges in 1999 represent the net of a $730,000 reversal (income) of estimated
costs relating to favorably settling lease obligations of certain closed stores
recorded during the second quarter of 1999 and $3,675,000 of expenses incurred
related to an abandoned merger transaction during the first quarter of 1999.

  Liquidity and Capital Resources


   Our $205.0 million line of credit from a syndicate of banks, which was
extended and increased from $200 million in February 2002, matures in July
2004. The line of credit is available for expansion, acquisitions, share
repurchases and other general corporate purposes. At December 31, 2001, we had
$175.0 million outstanding (with availability of $25.0 million) under this
credit facility at an average interest rate of 5.0% and had cash and cash
equivalent balances aggregating approximately $31.1 million. Our average
borrowing rate declined by approximately 4 percentage points since December 31,
2000.



   For the year ended December 31, 2001, we funded our capital expenditures of
$73.5 million, out of existing cash balances, cash flow from operations and
borrowings. During 2000, we completed the purchase of Rainforest Cafe through a
cash tender offer and subsequent merger. Our existing credit facility provided
the necessary acquisition funds. Additional acquisition costs of approximately
$32.6 million were paid in 2001, funded by available cash balances and
borrowings on our bank line of credit. Acquisition amounts exclude the
dissenting shareholders demand for supplemental payment in excess of $3.25 per
share. We believe that the Rainforest Cafe merger consideration we paid of
$3.25 per share was not below fair value of Rainforest Cafe and will pursue the
determination of fair value in an appraisal proceeding.


                                      16

<PAGE>


   We expect to spend approximately $90.0 million on capital expenditures in
2002. The capital expenditures include partial construction costs on an
estimated sixteen to eighteen new seafood and one new Rainforest Cafe
restaurants,and a new Aquarium restaurant, which are expected to open in 2002
or early 2003, plus further land acquisition costs and other capital
expenditures. We have entered into an agreement to construct and operate a
convention center in the City of Galveston, Texas. The Galveston Convention
Center's estimated construction costs of approximately $28.0 million and
subsequent operating expenses will not be funded by us, but by governmental
agency bonds issued by the City of Galveston and serviced by certain hotel
occupancy taxes. In connection with the convention center development and
related management contract, we are obligated to purchase and donate, with a
reversionary interest, land required for use by the Galveston Convention
Center. Under the agreement, we will have the right to one-half of any profits
generated by the operation of the convention center.


   We have purchased property, including a multi-story building, adjacent to
the new Houston professional baseball park and close to the Houston Convention
Center. The property is also near the proposed new professional basketball
arena and other major venues under development and construction in the downtown
area of Houston, Texas. Subject to the availability of financing and certain
tax abatements, we plan to renovate the existing building into a 200-room
hotel. We expect renovation and construction costs to be approximately $25.0
million, which would be expended over three years.

   We plan to fund 2002 capital expenditures and any remaining Rainforest Cafe
acquisition costs out of existing cash balances, cash flow from operations and
availability under our existing credit facility. As a result of our tax
carryforwards and deferred tax assets, including amounts attributable to the
acquisition of Rainforest Cafe, we expect our cash flow from operations to be
subject to reduced Federal income tax payments for the foreseeable future, and
therefore provide additional cash flow for funding our business activities and
debt service.

   We pay an annual $0.10 per share dividend, declared and paid in quarterly
amounts.

   We, from time to time, review opportunities for restaurant acquisitions, and
investments in the hospitality, entertainment, amusement, food service and
facilities management and other industries. Our exercise of any such investment
opportunity may impact our development plans and capital expenditures. We
believe that adequate sources of capital are available to fund our business
activities through December 31, 2002.

  Seasonality and Quarterly Results

   Our business is seasonal in nature. Our reduced winter volumes cause
revenues and, to a greater degree, operating profits to be lower in the first
and fourth quarters than in other quarters. We have and continue to open
restaurants in highly seasonal tourist markets. We further note that the Joe's
Crab Shack concept restaurants tend to experience even greater seasonality and
sensitivity to weather than our other restaurant concepts. Periodically, our
sales and profitability may be negatively affected by adverse weather. The
timing of unit openings can and will affect quarterly results. We anticipate a
decline in revenues from the initial ("honeymoon") volumes of new units, and a
decline in 2002 revenues of certain of Rainforest Cafe restaurants.

  Impact of Inflation

   We do not believe that inflation has had a significant effect on our
operations during the past several years. We believe we have historically been
able to pass on increased costs through menu price increases, but there can be
no assurance that we will be able to do so in the future. Future increases in
restaurant labor costs, including expected future increase in federal minimum
wages, land and construction costs could adversely affect our profitability and
ability to expand.

                                      17

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   We are exposed to market risk primarily related to potential adverse changes
in interest rates as discussed below. We actively monitor exposure to market
risk and continue to develop and utilize appropriate risk management
techniques. We are not exposed to any other significant risks from the use of
derivative financial instruments. We do not use derivative financial
instruments for trading or to speculate on changes in interest rates or
commodity prices.

  Interest Rate Risk

   Total debt at December 31, 2001, included $175.0 million of floating-rate
debt attributed to a bank line of credit at an average interest rate of 5.0%.
The floating-rate debt will mature in July 2004. As a result, our annual
interest cost in 2002 will fluctuate based on short-term interest rates. The
impact on annual cash flow of a ten percent change in the floating rate
(approximately 0.5%) would be approximately $0.9 million annually based on the
floating-rate debt outstanding at December 31, 2001. Our floating-rate debt had
a book value and a fair market value of $175.0 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The financial statements are set forth commencing on page 22.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE

   During the fiscal years 1999, 2000 and 2001, and through the date of this
report, there have been no changes in our independent public accountants, nor
have any disagreements with such accountants or reportable events occurred.

                                      18

<PAGE>

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   Certain information relating to our directors and executive officers are
incorporated by reference from our definitive Proxy Statement in connection
with our Annual Meeting of Stockholders, which proxy statement will be filed
with the Securities and Exchange Commission not later than 120 days after the
close of our fiscal year ended December 31, 2001.

ITEM 11. EXECUTIVE COMPENSATION

   Certain information relating to our directors and executive officers is
incorporated by reference herein from our definitive Proxy Statement in
connection with our Annual Meeting of Stockholders, which proxy statement will
be filed with the Securities and Exchange Commission not later than 120 days
after the close of our fiscal year ended December 31, 2001.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   Certain information relating to our directors and executive officers are
incorporated by reference herein from our definitive Proxy Statement in
connection with our Annual Meeting of Stockholders, which proxy statement will
be filed with the Securities and Exchange Commission not later than 120 days
after the close of our fiscal year ended December 31, 2001.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   Certain information relating to our directors and executive officers is
incorporated by reference herein from our definitive Proxy Statement in
connection with our Annual Meeting of Stockholders, which proxy statement will
be filed with the Securities and Exchange Commission not later than 120 days
after the close of our fiscal year ended December 31, 2001.


                                      19

<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

   (a) 1. Financial Statements

      The following financial statements are set forth herein commencing on
   page 21:

          --Report of Independent Public Accountants

          --Consolidated Balance Sheets as of December 31, 2001 and 2000

          --Consolidated Statements of Income for the years ended December 31,
            2001, 2000 and 1999

          --Consolidated Statements of Stockholders' Equity for the years ended
            December 31, 2001, 2000 and 1999

          --Consolidated Statements of Cash Flows for the years ended December
            31, 2001, 2000 and 1999

          --Notes to Consolidated Financial Statements

      2. Financial Statement Schedules--Not applicable.

   (b) Reports on Form 8-K

          --No reports on Form 8-K were filed during the fourth quarter of 2001.

   (c) Exhibits

          --All exhibits required by Item 601 of Regulation S-K are listed in
            the accompanying "Exhibit Index" which immediately precedes such
            exhibits, and is incorporated herein by reference.

                                      20

<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Landry's Restaurants, Inc.:

We have audited the accompanying consolidated balance sheets of Landry's
Restaurants, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2001 and 2000, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Landry's Restaurants, Inc.,
and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
February 4, 2002
(except with respect to the matter discussed in Note 5 as to which the date is
February 25, 2002)

                                      21

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                            -------------------------
                                                                                2001         2000
                                                                            ------------ ------------
<S>                                                                         <C>          <C>
                                  ASSETS
CURRENT ASSETS:
   Cash and cash equivalents............................................... $ 31,081,008 $ 26,159,525
   Accounts receivable--trade and other....................................   13,518,828   10,653,387
   Inventories.............................................................   33,562,608   34,752,119
   Deferred taxes..........................................................    5,621,459    2,671,766
   Other current assets....................................................   10,336,996   12,302,393
                                                                            ------------ ------------
       Total current assets................................................   94,120,899   86,539,190
                                                                            ------------ ------------
PROPERTY AND EQUIPMENT, net................................................  587,828,723  559,737,798
GOODWILL, net of accumulated amortization of $1,660,000 and $1,523,000,
  respectively.............................................................    2,438,996    2,575,625
DEFERRED TAXES.............................................................           --    8,501,521
OTHER ASSETS, net..........................................................    5,782,578    6,520,641
                                                                            ------------ ------------
       Total assets........................................................ $690,171,196 $663,874,775
                                                                            ============ ============

                   LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable........................................................ $ 45,027,820 $ 40,192,661
   Accrued liabilities.....................................................   55,109,685   85,943,990
   Current portion of long-term notes and other obligations................           --       59,963
                                                                            ------------ ------------
       Total current liabilities...........................................  100,137,505  126,196,614
                                                                            ------------ ------------
LONG-TERM NOTES, NET OF CURRENT PORTION....................................  175,000,000  155,000,000
DEFERRED TAXES.............................................................    4,126,948           --
OTHER LIABILITIES..........................................................   17,236,120   18,125,503
                                                                            ------------ ------------
       Total liabilities...................................................  296,500,573  299,322,117
                                                                            ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
   Common Stock, $0.01 par value, 60,000,000 shares authorized, 21,996,369
     and 21,498,352 issued and outstanding, respectively...................      219,964      214,984
   Additional paid-in capital..............................................  305,598,659  301,225,712
   Retained earnings.......................................................   87,852,000   63,111,962
                                                                            ------------ ------------
       Total stockholders' equity..........................................  393,670,623  364,552,658
                                                                            ------------ ------------
       Total liabilities and stockholders' equity.......................... $690,171,196 $663,874,775
                                                                            ============ ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      22

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                         ---------------------------------------
                                                             2001          2000         1999
                                                         ------------  ------------ ------------
<S>                                                      <C>           <C>          <C>
REVENUES................................................ $746,642,287  $520,979,796 $438,986,243
OPERATING COSTS AND EXPENSES:
   Cost of revenues.....................................  219,683,690   156,786,917  136,321,031
   Restaurant labor.....................................  215,662,020   147,192,415  125,566,341
   Other restaurant operating expenses..................  185,186,106   122,098,633  101,562,887
   General and administrative expenses..................   38,003,488    26,652,446   21,353,610
   Depreciation and amortization........................   37,147,325    33,391,788   22,229,762
   Restaurant pre-opening expenses......................    2,598,293     3,401,511    3,764,389
   Store closings and special charges...................           --     2,000,000    2,945,000
                                                         ------------  ------------ ------------
       Total operating costs and expenses...............  698,280,922   491,523,710  413,743,020
OPERATING INCOME........................................   48,361,365    29,456,086   25,243,223
OTHER EXPENSE (INCOME):
   Interest expense (income), net.......................    9,402,351     6,617,567    1,964,969
   Other, net...........................................      (56,285)      886,573     (177,711)
                                                         ------------  ------------ ------------
                                                            9,346,066     7,504,140    1,787,258
INCOME BEFORE INCOME TAXES..............................   39,015,299    21,951,946   23,455,965
PROVISION FOR INCOME TAXES..............................   12,095,730     7,301,828    8,080,232
                                                         ------------  ------------ ------------
NET INCOME.............................................. $ 26,919,569  $ 14,650,118 $ 15,375,733
                                                         ============  ============ ============
EARNINGS PER SHARE INFORMATION:

BASIC
   Net income........................................... $       1.24  $       0.63 $       0.58
   Weighted average number of common shares outstanding.   21,750,000    23,400,000   26,675,000

DILUTED
   Net income........................................... $       1.19  $       0.62 $       0.57
   Weighted average number of common and common share
     equivalents outstanding............................   22,535,000    23,600,000   27,025,000
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      23

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                          Common Stock       Additional
                                      --------------------    Paid-In      Retained
                                        Shares     Amount     Capital      Earnings       Total
                                      ----------  --------  ------------  -----------  ------------
<S>                                   <C>         <C>       <C>           <C>          <C>
BALANCE, January 1, 1999............. 30,345,290  $303,453  $363,156,349  $45,212,273  $408,672,075
   Net income........................         --        --            --   15,375,733    15,375,733
   Exercise of stock options and tax
     benefit.........................    900,000     9,000     6,294,105           --     6,303,105
   Purchase of common stock held in
     treasury........................ (6,422,165)  (64,222)  (46,845,354)  (6,093,299)  (53,002,875)
                                      ----------  --------  ------------  -----------  ------------
BALANCE, December 31, 1999........... 24,823,125   248,231   322,605,100   54,494,707   377,348,038
   Net income........................         --        --            --   14,650,118    14,650,118
   Dividends paid....................                                      (1,764,579)   (1,764,579)
   Purchase of common stock held in
     treasury........................ (3,324,773)  (33,247)  (21,379,388)  (4,268,284)  (25,680,919)
                                      ----------  --------  ------------  -----------  ------------
BALANCE, December 31, 2000........... 21,498,352   214,984   301,225,712   63,111,962   364,552,658
   Net income........................          -                           26,919,569    26,919,569
   Dividends paid....................                                      (2,167,959)   (2,167,959)
   Purchase of common stock held in
     treasury........................     (3,506)      (35)      (64,797)     (11,572)      (76,404)
   Exercise of stock options and tax
     benefit.........................    501,523     5,015     4,437,744           --     4,442,759
                                      ----------  --------  ------------  -----------  ------------
BALANCE, December 31, 2001........... 21,996,369  $219,964  $305,598,659  $87,852,000  $393,670,623
                                      ==========  ========  ============  ===========  ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      24

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                  ------------------------------------------
                                                                      2001           2000           1999
                                                                  -------------  -------------  ------------
<S>                                                               <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income..................................................... $  26,919,569  $  14,650,118  $ 15,375,733
 Adjustments to reconcile net income to net cash provided by
   operating activities:
   Store closings and special charges............................            --             --      (730,000)
   Gain on sales of assets.......................................      (565,822)            --      (779,371)
   Depreciation and amortization.................................    37,147,325     33,391,788    22,229,762
   Deferred rent.................................................      (241,155)      (413,988)           --
   Changes in assets and liabilities:
     (Increase) decrease in trade and other receivables..........    (2,865,441)     4,364,595     6,612,899
     (Increase) decrease in inventories..........................     1,189,511     (7,758,689)    4,429,497
     (Increase) decrease in other assets.........................     8,977,078     11,234,860     2,147,994
     Increase (decrease) in accounts payable and accrued
       liabilities...............................................    18,410,181      9,866,444     6,815,646
                                                                  -------------  -------------  ------------
   Total adjustments.............................................    62,051,677     50,685,010    40,726,427
                                                                  -------------  -------------  ------------
       Net cash provided by operating activities.................    88,971,246     65,335,128    56,102,160
CASH FLOWS FROM INVESTING ACTIVITIES:
  Property and equipment additions...............................   (73,462,974)   (77,399,028)  (55,123,127)
  Proceeds from sale of property and equipment...................       750,000             --     1,499,995
  Purchase of Rainforest Cafe, net of cash acquired..............   (32,580,607)   (44,562,492)           --
  Other..........................................................            --       (170,000)           --
                                                                  -------------  -------------  ------------
       Net cash used in investing activities.....................  (105,293,581)  (122,131,520)  (53,623,132)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Sale (purchases) of common stock...............................       (76,404)   (25,680,919)  (53,002,875)
  Proceeds from exercise of stock options........................     3,548,144             --     5,400,000
  Borrowings (payments) under credit line, net...................    19,940,037     86,907,083    32,918,108
  Dividends paid.................................................    (2,167,959)    (1,764,579)           --
  Other..........................................................            --        516,666            --
                                                                  -------------  -------------  ------------
       Net cash provided by (used in) financing activities.......    21,243,818     59,978,251   (14,684,767)
NET INCREASE (DECREASE) IN CASH AND
  EQUIVALENTS....................................................     4,921,483      3,181,859   (12,205,739)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
  YEAR...........................................................    26,159,525     22,977,666    35,183,405
                                                                  -------------  -------------  ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR......................... $  31,081,008  $  26,159,525  $ 22,977,666
                                                                  =============  =============  ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
Cash paid during the period for:
   Interest...................................................... $  10,230,853  $   7,692,000  $  4,093,000
   Income taxes.................................................. $          --  $   2,312,000  $    491,837
</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                      25

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

   Landry's Restaurants, Inc. (the "Company") owns and operates seafood
restaurants primarily under the trade names Landry's Seafood House, Joe's Crab
Shack and The Crab House. In addition, the Company owns and operates domestic
and licenses international rainforest themed restaurants under the trade name
Rainforest Cafe. Rainforest Cafe, Inc. ("Rainforest Cafe"), a casual dining
restaurant chain, was acquired in 2000.

   The Company is also the developer and operator of the Kemah Boardwalk,
located near Houston, Texas. The Kemah Boardwalk is a 30 acre waterfront
restaurant development including seven restaurants, a boutique hotel, retail
shops, amusement attractions, and a marina.

Principles of Consolidation

   The accompanying financial statements include the consolidated accounts of
Landry's Restaurants, Inc., a Delaware holding company and its wholly and
majority owned subsidiaries and partnership.


   The Company early adopted, as of March 31, 2001, newly released guidance for
accounting for certain sales incentives and revised the recognition and income
statement classification for certain discounts, certificates, and offers. There
were no reclassifications to prior financial statements as amounts were not
deemed material, and the change had no impact on reported earnings.



   Two new financial accounting standards were issued addressing accounting for
business combinations, goodwill and other intangible assets. Management does
not believe either pronouncement has a material effect on the Company's
financial statements.


Inventories

   Inventories consist of food and beverages used in restaurant operations and
complementary retail goods and are recorded at the lower of cost or market
value as determined by the average cost for food and beverages and by the
retail method on the first-in, first-out basis for retail goods. Inventories
consisted of the following:

<TABLE>
<CAPTION>
                                          December 31,
                                     -----------------------
                                        2001        2000
                                     ----------- -----------
                   <S>               <C>         <C>
                   Food and beverage $24,162,722 $26,295,177
                   Retail goods.....   9,399,886   8,456,942
                                     ----------- -----------
                                     $33,562,608 $34,752,119
                                     =========== ===========
</TABLE>

Property and Equipment

   Property and equipment are recorded at cost. Expenditures for major renewals
and betterments are capitalized while maintenance and repairs are expensed as
incurred.


   The Company computes depreciation using the straight-line method. The
estimated lives used in computing depreciation are as follows: buildings and
improvements--5 to 40 years; furniture, fixtures and equipment--4 to 10 years;
and leasehold improvements--shorter of 30 years or lease term, including
extensions where appropriate.


                                      26

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



   Interest is capitalized in connection with restaurant construction and
development activities, and other real estate development projects. The
capitalized interest is recorded as part of the asset to which it relates and
is amortized over the asset's estimated useful life. During 2001, 2000 and
1999, the Company capitalized approximately $2,437,000, $1,650,000 and
$1,285,000, respectively, of interest costs.


   Restaurant and other properties are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recovered. The recoverability of properties that are to be held and used
is measured by comparison of the estimated future undiscounted cash flows
associated with the asset to the carrying amount of the asset. If such assets
are considered to be impaired, an impairment charge is recorded in the amount
by which the carrying amount of the assets exceeds their fair value. Properties
to be disposed of are reported at the lower of their carrying amount or fair
value, reduced for estimated disposal costs.





Pre-Opening Costs

   Pre-opening costs are expensed as incurred and include the direct and
incremental costs incurred in connection with the commencement of each
restaurant's operations, which are substantially comprised of training-related
costs.

Development Costs

   Certain direct costs are capitalized in conjunction with site selection for
planned future restaurants, acquiring restaurant properties and other real
estate development projects. Direct and certain indirect costs, including
interest, are capitalized in conjunction with construction and development
projects. These costs are included in property and equipment in the
accompanying consolidated balance sheets and are amortized over the life of the
related building and leasehold interest. Costs related to abandoned site
selections and general site selection costs which cannot be identified with
specific restaurants are charged to operations.

Goodwill

   Goodwill is amortized over 30 years. Other intangible assets are amortized
over the life of the related agreement. These amounts are included in goodwill
and other assets in the accompanying consolidated balance sheets, respectively.

Earnings Per Share


   Net income per common share has been computed in accordance with Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". Basic
earnings per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the year. Diluted earnings
per share reflects the potential dilution that could occur if contracts to
issue common stock were exercised or converted into common stock. For purposes
of this calculation, outstanding stock options are considered common stock
equivalents using the treasury stock method. Options to purchase approximately
200,000 in 2001 and 1,300,000 shares in 2000 and 1999 have been excluded from
the calculation of diluted earnings per share for 2000 and 1999, as they were
anti-dilutive.


Cash Flow Reporting

   For purposes of the consolidated financial statements, the Company considers
all highly liquid investments with original maturities of three months or less
to be cash equivalents.

Segment Reporting

   As of December 31, 2001, the Company operated 191 casual full-service dining
restaurants which are a part of a single operating segment. The restaurants
operate principally in the United States and provide similar products to
similar customers. The restaurants generally possess similar pricing structures
resulting in the potential for similar long-term expected financial performance
characteristics. Revenues are from the sale of food, beverages and
complementary retail items.

                                      27

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Use of Estimates

   The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may differ from those estimates.

2. ACQUISITION OF RAINFOREST CAFE, INC.


   On October 28, 2000, the Company accepted for purchase 12,455,011 shares of
the common stock, no par value of Rainforest Cafe that had been tendered
pursuant to a tender offer for all of the outstanding shares at $3.25 per
share. As of the closing of the tender offer, the Company owned approximately
60% majority ownership in Rainforest Cafe. On December 1, 2000, the Company
completed the 100% merger of Purchaser with and into Rainforest Cafe, with
Rainforest Cafe, as the surviving corporation. The aggregate purchase price for
all outstanding shares was approximately $70 million, which was provided
primarily from the Company's existing bank credit facility. The aggregate
purchase price includes payments tendered to dissenting shareholders on
February 13, 2001.


   The acquisition was accounted for by the purchase method of accounting and,
accordingly, the Company's financial statements include the Company's ownership
portion of the operating results of Rainforest Cafe since November 1, 2000. The
assets acquired and liabilities assumed were recorded at estimated fair values
as determined by the Company's management. The preliminary allocation of the
purchase price was revised by $8.4 million based on the final determination of
fair values. A final summary of the assets acquired and liabilities assumed in
the acquisition follows:

<TABLE>
<CAPTION>
                                                                 (Thousands)
    <S>                                                          <C>
    Estimated fair values of assets acquired....................  $139,650
    Liabilities assumed.........................................   (60,244)
    Allocated purchase price....................................    79,406
    Less cash acquired and amount payable for outstanding shares   (34,844)
                                                                  --------
    Net cash paid, as of December 31, 2000......................  $ 44,562
                                                                  ========
</TABLE>


   As a result of the acquisition, the Company has recorded acquisition
integration costs for the estimated incremental costs to exit and consolidate
activities at various locations, to involuntarily terminate employees, and for
other costs to integrate operating locations and other activities of Rainforest
Cafe with the Company. Accounting principles generally accepted in the United
States, provide that these acquisition integration expenses, which are not
associated with the generation of future revenues and have no future economic
benefit, be reflected as assumed liabilities in the allocation of the purchase
price. The components of the acquisition integration liabilities included in
the purchase price allocation for Rainforest Cafe are comprised of involuntary
corporate terminations of $10.0 million, facility rationalization and exit
costs of $16.7 million (which was reduced by $8.4 million during 2001 due to
finalization of management's preliminary plan for store closings) and other
miscellaneous costs of $4.0 million. Accrued merger costs as of December 31,
2000, included remaining Rainforest Cafe common stock acquisition costs of
$16.0 million, involuntary corporate termination costs of $8.2 million,
restaurant exit costs of $16.7 million, and other miscellaneous costs of $3.5
million. During 2001, accrued merger costs were reduced by cash payments
aggregating $32.5 million and by purchase accounting adjustments that reduced
estimated facility rationalization and exit costs by $8.4 million.



                                      28

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Unaudited pro forma results of operations are prepared as if Landry's and
Rainforest Cafe had been combined as of the beginning of the year, and include
estimates and assumptions which management believes are reasonable. Unaudited
pro forma results for the years ended December 31, 2000 and 1999, respectively,
are as follows: revenues of $740.0 million and $702.0 million; net income of
$14.0 million and $25.0 million; and basic net income per share of $0.60 and
$0.93, respectively. Rainforest Cafe operating results for 2000 include pre-tax
special charges for approximately $7 million related to store closings,
write-off of development and transaction cost and loss on sale of investments.
Pro forma results do not include any anticipated cost savings or other effects
of the planned integration and are not necessarily indicative of the results
which would have occurred if the business combination had been in effect on the
dates indicated, or which may result in the future.


3. PROPERTY AND EQUIPMENT

   Property and equipment is comprised of the following:


<TABLE>
<CAPTION>
                                                   December 31,
                                           ---------------------------
                                               2001           2000
                                           -------------  ------------
         <S>                               <C>            <C>
         Land............................. $ 100,924,886  $ 93,838,270
         Buildings and improvements.......   152,594,344   121,341,888
         Furniture, fixtures and equipment   153,184,645   134,503,489
         Leasehold improvements...........   290,614,126   279,658,133
         Construction in progress.........    23,463,382    27,102,500
                                           -------------  ------------
                                             720,781,383   656,444,280
         Less--accumulated depreciation...  (132,952,660)  (96,706,482)
                                           -------------  ------------
         Property and equipment, net...... $ 587,828,723  $559,737,798
                                           =============  ============
</TABLE>



   During 2001 and 2000, the Company evaluated recent unfavorable cash flows
related to certain low performing restaurants and concluded that these
properties were impaired based on the existing and anticipated future economic
outlook for such properties in their respective market areas. As a result, the
Company recorded asset impairment depreciation charges of approximately
$2,394,000 and $6,292,000, representing the difference between the estimated
fair value and carrying value for those restaurant properties. The asset
impairment charge is classified as depreciation and amortization expense in the
consolidated statements of income.


   Other current assets at December 31, 2001 and 2000 include approximately
$5,114,000 and $5,961,000 of assets held for sale. Other income for the year
ended December 31, 2001 and 1999 includes a gain on the involuntary conversion
of assets of $566,000 and $491,000 respectively.

4. ACCRUED LIABILITIES

   Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                                     December 31,
                                                -----------------------
                                                   2001        2000
                                                ----------- -----------
        <S>                                     <C>         <C>
        Payroll and related costs.............. $14,137,640 $10,898,420
        Rent, insurance and taxes, other than
          payroll and income taxes.............  24,845,811  17,841,483
        Accruals for Rainforest Cafe
          acquisition (Note 2).................   3,569,111  44,361,565
        Other..................................  12,557,123  12,842,522
                                                ----------- -----------
                                                $55,109,685 $85,943,990
                                                =========== ===========
</TABLE>


                                      29

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. DEBT


   As of December 31, 2001, the Company had a $200.0 million credit line from a
syndicate of banks which was extended and increased to $205 million in February
2002. The existing credit line may be increased to $220 million at the request
of the Company, subject to the addition of participating banks. The credit line
matures in July 2004, and is available for expansion, acquisitions, share
repurchases, and other general corporate purposes. Interest on the credit line
is payable monthly or quarterly at Libor or the banks' base rate plus a
financing spread (aggregating 5.0% at December 31, 2001). The Company's
financing spread is presently 2.25% for Libor, and 0.5% for base rate
borrowings, and may be decreased or increased by 25 basis points as the
Company's leverage ratio decreases or increases over predetermined percentages.
The credit line is secured by stock of subsidiaries, governed by certain
financial covenants, including maximum leverage ratio, maximum indebtedness,
tangible net worth and fixed charge coverage ratio tests, limitations of
capital expenditures to prescribed amounts, maximum annual cash dividends, and
limitations on repurchases of common stock. As of December 31, 2001, the
Company had $3.9 million in trade letters of credit and $25.0 million available
for borrowing under the credit line.


   Interest expense (income), net includes the following:

<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                             ----------------------------------
                                                2001        2000        1999
                                             ----------  ----------  ----------
<S>                                          <C>         <C>         <C>
Interest expense............................ $9,685,201  $7,180,597  $2,696,606
Interest income.............................   (282,850)   (563,030)   (731,637)
                                             ----------  ----------  ----------
                                             $9,402,351  $6,617,567  $1,964,969
                                             ==========  ==========  ==========
</TABLE>

6. INCOME TAXES

   An analysis of the provision for income taxes for the years ended December
31, 2001, 2000, and 1999 is as follows:

<TABLE>
<CAPTION>
                                              2001        2000       1999
                                           ----------- ---------- ----------
   <S>                                     <C>         <C>        <C>
   Tax Provision:
      Current income taxes................ $ 3,266,954 $  280,564 $2,184,218
      Deferred income taxes...............   8,828,776  7,021,264  5,896,014
                                           ----------- ---------- ----------
          Total provision................. $12,095,730 $7,301,828 $8,080,232
                                           =========== ========== ==========
</TABLE>

   The Company's effective tax rate, for the years ended December 31, 2001,
2000 and 1999, differs from the federal statutory rate as follows:

<TABLE>
<CAPTION>
                                                 2001  2000  1999
                                                 ----  ----  ----
              <S>                                <C>   <C>   <C>
              Statutory rate.................... 35.0% 35.0% 35.0%
              FICA tax credit................... (7.3) (7.7) (5.5)
              State income tax, net of federal
                tax benefit.....................  0.6   1.1   0.9
              Other.............................  2.7   4.9   4.1
                                                 ----  ----  ----
                                                 31.0% 33.3% 34.5%
                                                 ====  ====  ====
</TABLE>

   The provision for income taxes as a percentage of income before income taxes
was reduced to 31.0% from 34.5% effective July 1, 2000, as a result of
continuing favorable Federal income tax credits for tipped employees.

                                      30

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The Company's actual cash payments for annual income taxes due are currently
lower than the financial accrual rate due to significant differences between
book and tax accounting and tax credit and loss carryforwards.

   Deferred income tax assets and liabilities as of December 31 are comprised
of the following:

<TABLE>
<CAPTION>
                                                                 2001         2000
                                                             ------------  -----------
<S>                                                          <C>           <C>
Deferred Income Taxes:
   Current assets--accruals and other....................... $  5,621,000  $ 2,672,000
                                                             ============  ===========
   Non-current assets:
       AMT credit, FICA credit carryforwards, and other..... $ 20,156,000  $12,882,000
       Net operating loss carryforwards.....................    2,117,000    5,755,000
       Valuation allowance for carryforwards................   (5,000,000)  (5,000,000)
                                                             ------------  -----------
       Non-current deferred tax asset.......................   17,273,000   13,637,000
   Non-current liabilities--property and other..............  (21,400,000)  (5,136,000)
                                                             ------------  -----------
       Net deferred tax asset (liability)................... $ (4,127,000) $ 8,501,000
                                                             ============  ===========
</TABLE>

   A valuation allowance for deferred tax assets is provided when it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Realization is dependent upon the generation of future taxable income
or the reversal of deferred tax liabilities during the periods in which those
temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment. In connection with the
acquisition of Rainforest Cafe, the Company recorded a $32.0 million
non-current deferred income tax asset, net of a $5.0 million valuation
allowance as of December 31, 2000.

7. COMMITMENTS AND CONTINGENCIES

Lease Commitments


   The Company has entered into lease commitments for restaurant facilities as
well as certain fixtures, equipment and leasehold improvements. Under most of
the facility lease agreements, the Company pays taxes, insurance and
maintenance costs in addition to the rent payments. Certain facility leases
also provide for additional contingent rentals based on a percentage of sales
in excess of a minimum amount. Rental expense under operating leases was
approximately $40,600,000, $23,000,000, and $17,423,000 during the years ended
December 31, 2001, 2000, and 1999, respectively. Percentage rent included in
rent expense was $10,300,000 (increased due to inclusion of Rainforest Cafe
units), $1,756,000, and $1,157,000 for 2001, 2000 and 1999, respectively.


   In 2001, the Company entered into a $15.3 million equipment operating lease
agreement. The lease expires in 2011. The Company guarantees a minimum residual
value related to the equipment of approximately 66% of the total amount funded
under the agreement. The Company may purchase the leased equipment throughout
the lease term for an amount equal to the unamortized lease balance. The
Company believes that the equipment's fair value is sufficient that no amounts
will be due under the residual value guarantee.

   In connection with substantially all of the Rainforest Cafe leases, amounts
are provided for tenant inducements, rent abatements, and scheduled increases
in rent. Such amounts are recorded as other long-term liabilities on the
Company's consolidated balance sheet, and amortized or accrued as an adjustment
to rent expense, included in other restaurant operating expenses, on a
straight-line basis over the lease term.

                                      31

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The aggregate amounts of minimum operating lease commitments maturing in
each of the five years and thereafter subsequent to December 31, 2001, are as
follows:

<TABLE>
                     <S>                       <C>
                     2002..................... $ 30,978,000
                     2003.....................   30,722,000
                     2004.....................   36,092,000
                     2005.....................   28,963,000
                     2006.....................   26,121,000
                     Thereafter...............  187,454,000
                                               ------------
                        Total minimum rentals. $340,330,000
                                               ============
</TABLE>

Building Commitments


   As of December 31, 2001, the Company had future development and construction
commitments of approximately $14 million, including completion of construction
on certain new restaurants. The Company has entered into a long-term lease
agreement to develop and operate an Aquarium restaurant, public exhibit, and
entertainment project on city-owned property in Houston, Texas. Development
costs for the Aquarium restaurant project are expected to be approximately
$27 million, and is the major individual component in the Company's current
outstanding building commitments. In addition, the Company has also entered
into an agreement to construct and operate a convention center in the City of
Galveston, Texas. The Galveston convention center estimated construction costs
of approximately $28 million and subsequent operating expenses will be funded
by governmental agency bonds issued by the City of Galveston and serviced by
certain hotel occupancy taxes. In connection with the convention center
development and related management contract, the Company is obligated to
purchase and donate, with reversionary interest, land required for use by the
convention center and to guarantee certain construction cost overruns and
operating losses, if any, subject to certain rights of reimbursement. Under the
agreements, the Company will have the rights to one-half of any profits
generated by the operation of the convention center.


   The Company has purchased property, including a multi-story building,
adjacent to the new Houston professional baseball park, close to the Houston
Convention Center. The property is also near the proposed new professional
basketball arena and other major venues under development and construction in
the downtown area of Houston, Texas. Subject to the availability of financing
and certain tax abatements, the Company plans, in the future, to renovate the
existing building into a 200-room hotel. Renovation and construction costs are
expected to be approximately $25 million, which would be expended over three
years.

Loan Guarantee

   Rainforest Cafe, a wholly-owned subsidiary of the Company, has guaranteed
the borrowings of one of its foreign affiliates in which the Company owns a 20%
interest. The amount of the guaranty is limited.

Litigation and Claims

  Dissenters Rights

   Eighty-one former shareholders (holding 4,406,655 shares) of Rainforest
Cafe, Inc. dissented to the merger between the Company and Rainforest Cafe. On
February 13, 2001, Rainforest Cafe sent each of the 81 dissenting shareholders,
Rainforest Cafe's per share estimate of fair value, along with a check in the
amount of $3.25 per share, which was the original acquisition price per share.
Subsequently, seventy-eight of the dissenting shareholders have made a demand
for supplemental payment based on their belief that the fair value per share of
common stock of the former Rainforest Cafe was greater than $3.25 per share.
The Company believes that its estimate of fair value is correct and that the
dissenting shareholders' estimate of fair value is inflated. The Company will
vigorously pursue its determination of fair value in an appraisal proceeding.

                                      32

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Class Action Litigation

   Class action lawsuits were filed in 1999 against the Company in the United
States District Court for the Southern District of Texas. These actions name as
defendants the Company and others that participated in the Company's offering
of Common Stock in March 1998. Such lawsuits allege that the defendants
violated certain Federal securities laws. The plaintiffs seek unspecified
monetary damages. The Company believes these claims are without merit. The
parties of these lawsuits have reached a settlement, subject to judicial review
and other procedural activities before it becomes final.

  General Litigation

   The Company is subject to other legal proceedings and claims that arise in
the ordinary course of business. Management does not believe that the outcome
of any of these matters will have a material adverse effect on the Company's
financial position, results of operations or cash flows.

8. STOCKHOLDERS' EQUITY


   In connection with the Company's stock buy back programs the Company
repurchased into treasury approximately 3,500, 3.3 million and 6.4 million
shares of common stock for approximately $76,000, $26.0 million and $53.0
million, in 2001, 2000 and 1999, respectively.


   Commencing in 2000, the Company began to pay an annual $0.10 per share
dividend, declared and paid in quarterly installments of $0.025 per share.

   The Company maintains two stock option plans, which were originally adopted
in 1993, (the Stock Option Plans), as amended, pursuant to which options may be
granted to eligible employees and non-employee directors of the Company or its
subsidiaries for the purchase of an aggregate of 2,750,000 shares of common
stock of the Company. The Stock Option Plans are administered by the Stock
Option Committee of the Board of Directors (the Committee), which determines at
its discretion, the number of shares subject to each option granted and the
related purchase price, vesting and option periods. The Committee may grant
either non-qualified stock options or incentive stock options, as defined by
the Internal Revenue Code of 1986, as amended.

   The Company also maintains the 1995 Flexible Incentive Plan, which was
adopted in 1995, (Flex Plan), as amended, for key employees of the Company.
Under the Flex Plan eligible employees may receive stock options, stock
appreciation rights, restricted stock, performance awards, performance stock
and other awards, as defined by the Board of Directors or an appointed
committee. The aggregate number of shares of common stock which may be issued
under the Flex Plan (or with respect to which awards may be granted) may not
exceed 2,000,000 shares.


   The stock option plans are accounted for using APB Opinion No. 25, under
which no compensation expense has been recorded. If compensation costs for the
Company had been determined using the alternative accounting method based on
the fair value prescribed by SFAS No. 123, the Company's pro forma net income
for 2001, 2000, and 1999 would have been approximately $25.4 million $12.7
million and $12.2 million respectively, and the Company's proforma earnings per
share--basic would have been $1.17, 0.54, and $0.46 and per share-diluted would
have been $1.13, $0.54, and $0.45, respectively. The fair value of each option
grant is estimated on the date of grant using the Black-Scholes option-pricing
model; amortization over the respective vesting periods; no dividends; expected
lives of 6, 4, and 6 years for 2001, 2000, and 1999, respectively; expected
stock price volatility of approximately 40% and an interest rate of
approximately 6%. The weighted average fair value per share of options granted
during 2001, 2000 and 1999 was $5.82, $3.08, and $4.40, respectively.


                                      33

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   In connection with the acquisition of Rainforest Cafe, the Company issued
approximately 500,000 vested stock options to employees of Rainforest Cafe as
replacement for existing options outstanding at the date of the merger, as
required by the merger agreement. The fair value of these options was included
in the purchase price of Rainforest Cafe.


   At December 31, 2001, options for 3,040,926 shares were outstanding
(1,831,694 of which were exercisable) at prices ranging from $6.00 to $22.24
per share. As of December 31, 2001, all options have been granted at the stock
price on the grant date and are generally exercisable beginning one year from
the date of grant with annual vesting periods over three to five years.


<TABLE>
<CAPTION>
                                         2001                2000                1999
                                  ------------------- ------------------- -------------------
                                             Average             Average             Average
                                             Exercise            Exercise            Exercise
                                   Shares     Price    Shares     Price    Shares     Price
                                  ---------  -------- ---------  -------- ---------  --------
<S>                               <C>        <C>      <C>        <C>      <C>        <C>
Options outstanding, beginning of
 year............................ 3,169,803   $ 9.92  2,810,575   $ 9.97  3,646,741   $ 9.22
Granted..........................   623,500   $ 9.83    913,500   $11.44    105,500   $ 7.01
Exercised........................  (501,523)  $ 7.05         --       --   (900,000)  $ 6.00
Terminated.......................  (250,854)  $10.67   (554,272)  $12.73    (41,666)  $21.79
                                  ---------           ---------           ---------
Options outstanding, end of year. 3,040,926   $ 9.93  3,169,803   $ 9.92  2,810,575   $ 9.97
                                  =========           =========           =========
Options exercisable, end of year. 1,831,694   $10.99  1,827,959   $12.07  1,087,839   $12.58
                                  =========           =========           =========
</TABLE>

9. SPECIAL CHARGES

   For the years ended December 31, 2000 and 1999, the Company incurred
$2,000,000 and $2,945,000 of store closings and special charges, respectively.
In the second quarter of 2000 the Company expensed costs associated with a
proposed initial acquisition of Rainforest Cafe that was terminated. On March
2, 1999, the Company announced the signing of a definitive merger agreement.
The merger agreement was subsequently terminated on March 8, 1999 with no
further discussions. The Company incurred $3,675,000 in transaction costs in
connection with the definitive merger agreement which were expensed in the
first quarter of 1999. Additionally, the Company successfully exited seven
underperforming restaurants included in the 1998 store closings charge and
recorded a special credit of $730,000, during the second quarter of 1999, due
to the reversal of amounts originally recorded, since five lease terminations
were resolved favorably relative to amounts accrued at December 31, 1998.

10. RELATED PARTY TRANSACTIONS

   During 2000, in connection with the Company's initial attempt to acquire
Rainforest Cafe and the concurrent bank syndicate loan approval and renewal
negotiation, the Company obtained a commitment and funding for an unsecured
bridge loan of $10.0 million from the Chairman and Chief Executive Officer of
the Company. The Company paid a commitment fee of $125,000 and interest of
$172,000 related to the bridge loan, which were lower than the amounts
requested by the Company's lead syndicate bank for such a facility. The loan
was fully repaid after the Company's initial merger agreement was terminated.

   Effective January 1, 1996, the Company entered into a Consulting Service
Agreement (the "Agreement") with Fertitta Hospitality, LLC ("Fertitta
Hospitality"), which is jointly owned by the Chairman and Chief Executive
Officer of the Company and his wife. Pursuant to the Agreement, the Company
provides limited consulting services to Fertitta Hospitality with respect to
management and operational matters, administrative and personnel matters. The
Company receives a consulting fee of $2,500 per month under the Agreement plus

                                      34

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the reimbursement of all out-of-pocket expenses and such additional
compensation as may be agreed upon. The Agreement provides for a one-year term,
was renewed in 2001, and is automatically renewed unless either party
terminates the Agreement upon 30 days' written notice to the other party.

   In 1999, the Company entered into a ground lease with 610 Loop Venture, LLC,
a company wholly owned by the Chairman and Chief Executive Officer of the
Company, on land owned by the Company adjacent to the Company's corporate
headquarters. The ground lease is for a term of five years with one option
renewal period. Under the terms of the ground lease, 610 Loop Venture pays the
Company base rent of $12,000 per month plus pro-rata real property taxes and
insurance. 610 Loop Venture also has the option to purchase certain property
based upon an appraised value.


   In 2002, the Company entered into an $8,000 per month, 20 year, with option
renewals, ground lease agreement with Fertitta Hospitality for a new Rainforest
Cafe on prime waterfront land in Galveston, Texas. The annual rent is equal to
the greater of the base rent or percentage rent up to six percent, plus taxes
and insurance.


   The foregoing agreements were entered into between related parties and were
not the result of arm's-length negotiations. Accordingly, the terms of the
transactions may have been more or less favorable to the Company than might
have been obtained from unaffiliated third parties. The Company believes that
the terms of the transactions were at least as favorable to the Company as that
which could have been obtained in arm's-length transactions with unaffiliated
parties.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

   The following is a summary of unaudited quarterly consolidated results of
operations (in thousands, except per share data).

<TABLE>
<CAPTION>
                                                            March 31, June 30, September 30, December 31,
                                                              2001      2001       2001          2001
                                                            --------- -------- ------------- ------------
<S>                                                         <C>       <C>      <C>           <C>
Quarter Ended:
   Revenues................................................ $175,955  $207,415   $202,786      $160,486
   Operating income........................................ $  8,187  $ 17,794   $ 17,324      $  5,055
   Net income.............................................. $  3,700  $ 10,605   $ 10,543      $  2,071
   Net income per share (basic)............................ $   0.17  $   0.49   $   0.48      $   0.09
   Net income per share (diluted).......................... $   0.17  $   0.47   $   0.46      $   0.09
                                                            March 31, June 30, September 30, December 31,
                                                              2000      2000       2000          2000
                                                            --------- -------- ------------- ------------
Quarter Ended:
   Revenues................................................ $110,951  $134,042   $133,108      $142,879
   Asset impairment, store closings and special charges.... $     --  $  2,000   $     --      $  6,292
   Operating income (loss)................................. $  5,867  $ 11,010   $ 13,150      $   (571)
   Net income (loss)....................................... $  3,022  $  6,278   $  7,845      $ (2,495)
   Net income per share (basic)............................ $   0.12  $   0.26   $   0.34      $  (0.12)
   Net income per share (diluted).......................... $   0.12  $   0.26   $   0.34      $  (0.12)
   Net income per share before special charges (diluted)... $   0.12  $   0.31   $   0.34      $   0.08
</TABLE>

                                      35

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                         March 31, June 30,  September 30, December 31,
                                                           1999      1999        1999          1999
                                                         --------- --------  ------------- ------------
<S>                                                      <C>       <C>       <C>           <C>
Quarter Ended:
   Revenues............................................. $101,266  $123,607    $116,510      $97,603
   Store closings and special charges (credit).......... $  3,675  $   (730)   $     --      $    --
   Operating income..................................... $    482  $ 10,945    $ 10,822      $ 2,994
   Net income........................................... $    238  $  7,068    $  6,592      $ 1,478
   Net income per share (basic)......................... $   0.01  $   0.25    $   0.26      $  0.06
   Net income per share (diluted)....................... $   0.01  $   0.25    $   0.25      $  0.06
   Net income per share before special charges (credit)
     (diluted).......................................... $   0.09  $   0.24    $   0.25      $  0.06
</TABLE>


                                      36

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized in the City of Houston, State of Texas, on the 28th
day of February, 2002.

                                          LANDRY'S RESTAURANTS, INC.

                                          TILMAN J. FERTITTA
                                          --------------------------------------
                                          Tilman J. Fertitta,
                                          Chairman of the Board, President and
                                          Chief Executive Officer
   Each person whose signature appears below constitutes and appoints Tilman J.
Fertitta, Paul S. West and Steven L. Scheinthal, and each of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign on his behalf
individually and in each capacity stated below any amendment to this Annual
Report on Form 10-K and any amendment thereto and to file the same, with all
exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents and either of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof. Pursuant to the requirements of the Securities Act of
1934, this report has been signed by the following persons on behalf of the
registrants and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
     Signature                             Title                              Date
     ---------                             -----                              ----
<S>                  <C>                                                <C>

TILMAN J. FERTITTA   Chairman, President and Chief                      February 28, 2002
--------------------
Tilman J. Fertitta     Executive Officer, and Director
                       (Principal Executive Officer)

   PAUL S. WEST      Vice President, Chief Financial                    February 28, 2002
--------------------
   Paul S. West        Officer, and Director
                       (Principal Executive Officer)

STEVEN L. SCHEINTHAL Vice President, Secretary,                         February 28, 2002
--------------------
Steven L. Scheinthal   General Counsel and Director

MICHAEL S. CHADWICK  Director                                           February 28, 2002
--------------------
Michael S. Chadwick

 JAMES E. MASUCCI    Director                                           February 28, 2002
--------------------
 James E. Masucci

  JOE MAX TAYLOR     Director                                           February 28, 2002
--------------------
  Joe Max Taylor
</TABLE>



                                      37

<PAGE>

                                 EXHIBIT INDEX

   Certain of the exhibits to this report on Form 10-K are hereby incorporated
by reference to the Company's Registration Statement on Form S-1 No. 33-65498
and all amendments thereto ("A") and the Company's Form 10-Q for the quarterly
period ended June 30, 1995 ("B"), May 9, 1995 Proxy Statement ("C"), the June
25, 1997 Form 8-K ("D"), the 1995 Form 10-K ("E"), the May 1996 Form S-4 ("F"),
the Form 10-Q for the quarterly period ended September 30, 1999 ("G"), the
March 9, 1999 Form 8-K ("H"), the July 13, 2000 Form 8-K ("I"), the September
29, 2000 Schedule TO ("J"), and the Form 10-Q for the quarterly period ended
September 30, 2000 ("K"). Such exhibits are denoted with the letter. Exhibits
denoted by * are filed herewith.

<TABLE>
<CAPTION>
Exhibit No.                                               Exhibit
-----------                                               -------
<C>         <S>
     3.1    Certificate of Incorporation of Landry's Seafood Restaurants, Inc. as filed with the Delaware
            Secretary of State on June 23, 1993, as amended -A- (See Exhibit 3.1) and -B-
     3.2    Amendment to Certificate of Incorporation -A-
     3.3    Bylaws of Landry's Seafood Restaurants, Inc. -A- (See Exhibit 3.2)
     4      Specimen Common Stock Certificate, $.01 par value, of Landry's Seafood Restaurants, Inc. -A-
    10.1    1993 Stock Option Plan ("Plan") -C-
    10.2    Form of Incentive Stock Option Agreement under the Plan -A- (See Exhibit 10.61)
    10.3    Form of Non-Qualified Stock Option Agreement under the Plan -A- (See Exhibit 10.62)
    10.4    Non-Qualified Formula Stock Option Plan for Non-Employee Directors ("Directors' Plan") -A-
    10.5    First Amendment to Non-Qualified Formula Stock Option Plan for Non-Employee Directors -C-
    10.6    Form of Stock Option Agreement for Directors' Plan -A- (See Exhibit 10.64)
    10.7    Form of Personal Service and Employment Agreement of Tilman J. Fertitta -A- (See Exhibit 10.65)
    10.8    1995 Flexible Incentive Plan -C-
    10.9    Form of Consulting Services Agreement between Landry's Management, L.P. and Fertitta
            Hospitality -E-
    10.10   Form of Stock Option Agreement between Landry's Seafood Restaurants, Inc. and Tilman J.
            Fertitta -E-
    10.11   Contract of Sale and Development Agreement -G-
    10.12   Executive Employment Agreements -G-
    10.13   First Amended and Restated Credit Agreement date June 28, 2000, by and among Landry's Seafood
            Restaurants, Inc. and Bank of America, N.A., as Agent, and certain other financial institutions -I-
    10.14   Amendment No. 1 and Consent as of October 17, 2000 to the First Amended and Restated Credit
            Agreement dated June 28, 2000 by and among Landry's Seafood Restaurants Inc., the lenders from
            time to time party to the Credit Agreement, and Bank of America, N.A., as administrative agent for
            the Banks -K-
    10.15   Agreement and Plan of Merger, dated September 26, 2000, by and among Landry's Seafood
            Restaurants, Inc., LSR Acquisition Corp. and Rainforest Cafe, Inc. and related agreements -J-
  *10.16    Amendment No. 2 dated February 22, 2002 to the First Amended and Restated Credit Agreement
            dated June 28, 2000, by and among Landry's Seafood Restaurants, Inc. and Bank of America, N.A.,
            as Agent and certain other financial institutions.
  *11       Statement regarding computation of per share earnings--fully diluted -
  *21       Subsidiaries of Landry's Restaurants, Inc.
  *23       Consent of Arthur Andersen LLP
  *24       Power of Attorney--(see signature page)
</TABLE>

                                      38