<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, 2002 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
    Incorporation or Organization)          (IRS Employer Identification No.)
         1510 WEST LOOP SOUTH
           HOUSTON, TX 77027                              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. Yes [X]       No [_]

   Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12B-2 of the Act). Yes [X]       No [_]

   State the aggregate market value of the voting Common Stock held by
non-affiliates computed by reference to the price at which the Common Stock was
last sold as of the last business day of the registrant's most recent completed
second fiscal quarter, June 28, 2002. $587,601,570. 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
27,771,479 as of March 12, 2003.

                      DOCUMENTS INCORPORATED BY REFERENCE

   The Proxy Statement for the Registrant's 2003 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, 2002.

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

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                Page No.
                                                                                                --------
<C>       <S>                                                                                   <C>
PART I.
Item 1.   Business.............................................................................     3
Item 2.   Properties...........................................................................    12
Item 3.   Legal Proceedings....................................................................    12
Item 4.   Submission of Matters to a Vote of Security Holders..................................    12

PART II.
Item 5.   Market For the Registrant's Common Stock and Related Stockholder Matters.............    13
Item 6.   Selected Financial Data..............................................................    14
Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations    15
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk...........................    19
Item 8.   Financial Statements and Supplementary Data..........................................    19
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.    19

PART III.
Item 10.  Directors and Executive Officers of the Registrant...................................    20
Item 11.  Executive Compensation...............................................................    20
Item 12.  Security Ownership of Certain Beneficial Owners and Management.......................    20
Item 13.  Certain Relationships and Related Transactions.......................................    21
Item 14.  Controls and Procedures..............................................................    22

PART IV.
Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................    22

SIGNATURES.....................................................................................    42

EXHIBIT INDEX..................................................................................

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

                                      1

<PAGE>

                          FORWARD LOOKING STATEMENTS

   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".

   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, Charley's Crab, The Chart House,
Saltgrass Steak House and Rainforest Cafe. As of December 31, 2002, we were the
second largest seafood restaurant chain in the United States, and operated 267
full service restaurants. In addition, at year end, there were eight acquired
Chart House seafood restaurants operating but scheduled for closure and
redevelopment into Joe's Crab Shack restaurants. The ongoing unit count on
December 31, 2002, consisted of 121 Joe's Crab Shack restaurants, 39 Landry's
Seafood House division restaurants, 27 Chart House restaurants, 27 Saltgrass
Steak House division restaurants, 25 Rainforest Cafe restaurants, 15 Charley's
Crab restaurants (Muer division), 13 Crab House restaurants, and a small number
of 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. During 2002, we acquired 15 Charley's Crab seafood restaurants
located primarily in Michigan and Florida, and 27 Chart House seafood
restaurants, located primarily on the East and West coasts of the United
States. Both of these acquisitions included plans for the redevelopment of an
additional 10 acquired lower profitability restaurants into Joe's Crab Shack
restaurants, and the sale or disposal of six additional non-strategic
locations. In October 2002, we purchased 27 Texas-based Saltgrass Steak House
restaurants.

   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, and represents our primary growth vehicle. 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 $8.99 to $15.99, with
certain crab items available at market price. Lunch entree prices range from
$4.99 to $8.99. During the year ended December 31, 2002, 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 and was the original growth strategy,
although in recent years the growth has been focused and concentrated on the
Joe's Crab Shack restaurants and acquisitions. 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 $22.99, with certain items offered at market price. Lunch
entrees range from $7.99 to $10.99. During the year ended December 31, 2002,
alcoholic beverage sales accounted for approximately 15% of the concept's total
restaurant revenues.

   Rainforest Cafe.  The Rainforest Cafe restaurants, which were acquired in
2000, provide full service casual dining in a visually and audibly stimulating
and entertaining rainforest environment that appeals to a broad range

                                      3

<PAGE>

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 $19.99. Lunch
entree prices range from $8.99 to $12.99. During the year ended December 31,
2002, retail sales and alcoholic beverage sales accounted for approximately 23%
of the concept's total restaurant revenues. Rainforest Cafe restaurants
typically are larger units and generate higher unit volumes than the typical
restaurant, although their operating margins and operating cost margin
percentages are quite similar to the Company's other restaurants. We are
growing this division more slowly than the other growth concepts.

   The Crab House.  The Crab House, acquired in 1996, is a full service casual
dining seafood 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, 2002, alcoholic
beverage sales accounted for approximately 18% of the concept's total
restaurant revenues.

   Chart House and C.A. Muer.  The Chart House and C.A. Muer (trade name
Charley's Crab) restaurants, which were acquired in 2002 but generally have
very long and successful operating histories, provide an upscale full service
dining experience. Located on some of the most scenic properties on the East
and West coasts, many Chart House restaurants, which were founded in 1961, sit
on prime water-front venues. Charley's Crab restaurants, which were founded in
1964, are generally situated throughout Michigan and Florida, include numerous
waterfront locations and have unique architectural details with two restaurants
located in renovated historical train stations. Both restaurant menus offer an
extensive variety of seasonal fresh fish, shrimp, beef and other daily seafood
specialties, and several restaurants also offer lunch seating and a Sunday
brunch. Chart House dinner entree prices range from $18.99 to $30.99 with lunch
entree prices ranging from $8.99 to $14.99. Charley's Crab dinner entree prices
range from $18.99 to $32.99 with lunch entree prices ranging from $8.99 to
$16.99. During the year ending December 31, 2002, alcoholic beverage sales
accounted for approximately 21% of the Chart House restaurant revenues and 17%
of the C.A. Muer total restaurant revenues.

   Saltgrass Steak House.  Saltgrass Steak House, acquired in 2002 for the
purpose of additional growth complementary to Joe's Crab Shack, offers
full-service casual dining in a Texas-Western theme. Prototype buildings
welcome guests into a stone and wood beam ranch house complete with a roaring
fireplace and a saloon-style bar. Customers are presented with a host of menu
options ranging from filet mignon to chicken fried steak to fresh fish to
grilled chicken breast. Dinner entree prices range from $9.99 to $24.99 and
lunch prices range from $6.99 to $13.99. During the year ended December 31,
2002, alcoholic beverage sales accounted for approximately 11% of the concept's
total restaurant revenues.

   Specialty Growth Division.  The opening of our Company owned Kemah Boardwalk
in 1999, with its multiple attractions including specialty retail shops,
boutique hotel, carnival-style rides and games, and other attractions combined
with several of our restaurants introduced a new growth vehicle for our
Company, the Specialty Growth Division. This division provides us the
opportunity to expand our realm of business into areas that are closely related
to our core restaurant business. This expansion is in addition and
complementary to the growth of our core concepts and potential future
acquisitions and includes the following projects:

  .  Kemah Boardwalk and the Aquarium--Galveston, Texas.  Kemah Boardwalk is an
     approximately 30-acre entertainment complex in the Galveston, Texas area,
     that features seven of our restaurants, retail shops, a hotel, amusement
     rides and a marina and is the home of our initial landmark aquarium themed
     restaurant named The Aquarium--An Underwater Dining Adventure. The
     Aquarium restaurant concept offers seafood dining in an extraordinary
     setting. Guests are seated around a large centerpiece aquarium and
     numerous smaller aquariums with decor and lighting that complement the
     overall dining experience, and dine amongst fish and coral with the
     illusion of being at the bottom of the sea. As of December 31, 2002, there
     was one Aquarium restaurant located at our Kemah Boardwalk development,
     although a second additional

                                      4

<PAGE>

     Aquarium opened in early 2003 in Houston, Texas, and another location is
     expected to open early 2004 in Denver, Colorado.

  .  Downtown Aquarium--Houston, Texas. Guests of the Downtown Aquarium in
     Houston, Texas, which opened in February 2003, can choose to dine in the
     Aquarium--An Underwater Dining Adventure featuring seafood dining centered
     around a large coral reef aquarium, or for a more casual fare, guests can
     choose the Marina Matinee Cafe. In addition to the two restaurants, the
     Downtown Aquarium features a public aquarium complex with over 200
     species, a giant acrylic shark tank, dancing water fountains, a
     mini-amusement park and a bar/lounge.

  .  Downtown Aquarium--Denver, Colorado. In March 2003, we acquired Ocean
     Journey, a 12-acre, aquarium complex located adjacent to downtown Denver,
     Colorado. This world-class facility, home to over 500 species, was built
     by a non-profit organization in 1999 at a cost of $93 million. Landry's
     purchased this ongoing aquarium enterprise in federal bankruptcy
     proceedings for $13.6 million with no outstanding debt or obligations.
     Upon assumption of ownership, Landry's reduced the complex's workforce,
     keeping personnel necessary for on-going operations and significantly
     reducing the corporate overhead. Plans are underway to add an up-scale
     Aquarium seafood restaurant, a casual dining cafe--the Marina Matinee
     Cafe, and family amusements, which will transform the aquarium into a
     recreational destination adding a second Downtown Aquarium to the
     Specialty Growth Division. We expect the redevelopment to be completed in
     2004.

  .  Rainforest Cafe--Galveston, Texas. A new Rainforest Cafe opened in
     Galveston, Texas in January 2003. It boasts a dramatic display of sounds,
     lights, fire and lava as its active volcano facade erupts at dusk and
     continues every half-hour thereafter. An outdoor plaza includes a variety
     of midway games as well as retail and beverage kiosks. The Rainforest
     River Adventure Ride gives guests an opportunity for an entertaining trip
     to the rainforests of the world aboard a six-person river raft. Resident
     parrots and other tropical birds are featured daily as our expert curators
     encourage interaction with guests and share their knowledge about these
     exotic creatures.

  .  Flagship Inn and Pleasure Pier--Galveston, Texas. Plans to purchase and
     renovate the Galveston Flagship Hotel presently owned by the City of
     Galveston are underway. It is to be transformed into an 1800's-style inn
     located on a pier overlooking the Galveston Bay and Gulf of Mexico. The
     surrounding pier will provide an assortment of entertainment and boardwalk
     games including a roller coaster, ferris wheel and lighthouse reminiscent
     of an earlier historical leisure time period.

  .  The Texas Boardwalk--Corpus Christi, Texas. A potential development is in
     the negotiating and planning stages for a renovation of the downtown City
     Marina on Corpus Christi Bay owned by the City of Corpus Christi, Texas.
     The proposed restoration, if finalized and agreed to by relevant parties,
     would result in the creation of the Texas Boardwalk: a waterfront
     attraction highlighted by a series of paved and landscaped plazas that
     will form a world class marina, entertainment, dining, and meeting
     facility. Our proposal, if accepted, is to improve the current marina and
     to add to our existing Joe's Crab Shack and Landry's Seafood House
     restaurants already at or adjacent to the site by constructing an Aquarium
     restaurant and a Rainforest Cafe. In addition, the marina's reputation as
     a family, convention and tourist destination will be enhanced by many of
     the features that have made the Kemah Boardwalk a success. These
     attractions include amusements, retail, kiosks, events and fountains.

  .  Inn at the Ballpark--Houston, Texas. The Inn at the Ballpark is located in
     downtown Houston directly across the street from Minute Maid Park, home of
     the Houston Astros baseball team. This new luxury hotel with over 200
     rooms, scheduled to open in time for Houston's 2004 NFL Super Bowl and the
     Major League Baseball's 2004 All-Star game, will offer visitors to Houston
     easy access to all of Houston's amenities including the newly expanded
     George R. Brown Convention Center, the new Houston Rockets basketball
     arena, the Theater District, Minute Maid Professional Baseball Park, and
     our Downtown Aquarium.

  .  Galveston Convention Center. The revitalization of the Galveston seawall
     on the Gulf of Mexico, an area that includes a significant number of our
     restaurants, is underway with the groundbreaking of the new

                                      5

<PAGE>

     Galveston Convention Center scheduled to open in 2004. The convention
     center will be housed on a 26-acre beachfront locale. The facility will
     accommodate a 43,000 square foot exhibition hall, a 15,500 square foot
     ballroom and over 12,000 square feet of smaller breakout rooms. The
     convention center will be owned by the City of Galveston and will be
     managed and operated by the Company.

  .  Holiday Inn on the Beach--Galveston, Texas. In March 2003, we acquired
     this 180 room beachfront resort hotel located along Galveston's seawall
     and near the new Convention Center under construction.

Strategy

   Our objective is to develop and operate a nationwide system of restaurants
that offers customers a fun dining experience, creates a loyal customer base
that generates a high level of repeat business and provides 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.  Our restaurant
     concepts generally have 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 that 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. As of December 31,
     2002, we had 84 restaurants that are considered waterfront properties,
     which we believe is the largest collection of waterfront restaurants of
     any domestic company.

  .  Commitment to attracting and retaining quality employees.  We believe
     there is a high correlation between the quality of restaurant management
     and its long-term success. 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 U.S. 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 and knowledge. 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. In addition, we intend to commence a similar
     growth program for Saltgrass Steak House restaurants. 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, and achieve or exceed target financial results
     and returns.

                                      6

<PAGE>

  .  Development of Specialty Growth Division.  The Specialty Growth Division
     works to develop multi-purpose venues offering themed restaurants,
     amusements, shops, convention centers and/or resort/convention hotel
     facilities and operations. These attractions are situated in strategic
     locations and offer an array of dining and entertainment options that
     appeal to a wide range of tastes and budgets. In early 2003, the Downtown
     Aquarium in Houston, Texas and the Rainforest Cafe in Galveston, Texas
     were opened. The Inn at the Ballpark, a 200-room luxury hotel located next
     to Minute Maid Professional Baseball Park in downtown Houston, and a city
     funded convention center in Galveston, Texas are currently under
     construction. In addition to these endeavors, growth should continue well
     into 2004 and beyond with the development of the Flagship Hotel and
     Pleasure Pier in Galveston and the potential Texas Boardwalk in Corpus
     Christi, which are both currently in the negotiating and planning stage.
     The Specialty Growth Division will also be working to develop the recently
     acquired Ocean Journey into the Downtown Aquarium--Denver, a first-class
     tourist and entertainment destination adjacent to downtown Denver,
     Colorado.

  .  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, Rainforest Cafe in 2000, and
     C.A. Muer, Chart House and Saltgrass Steak House restaurants in 2002. 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.

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.

   The following is an update on our recent acquisitions:

   Rainforest Cafe.  Our integration efforts produced additional margin
expansion in 2002, but most importantly, we were able to stem the tide of
previous prolonged revenue declines in the shopping center mall locations. In
fact, sales trends at these locations and at tourist venue units were
dramatically better, resulting in essentially flat comparative sales for the
year.

   Chart House/Muer.  The Chart House and Muer acquisitions provided us the
opportunity to purchase a collection of valuable restaurant locations, many of
which are situated on premium waterfront properties on the Pacific and Atlantic
Oceans. We have begun the process of remodeling many of these units, freshening
and updating the look of these venues. In addition these restaurants are
undergoing menu evaluation and re-engineering, as we look to feature successful
dishes from previous menus side-by-side with bold, fresh ideas from our
culinary experts. Certain low performing locations are planned for
redevelopment into Joe's Crab Shack restaurants.

   Saltgrass Steak House.  The nearly seamless integration of Saltgrass into
our systems in late 2002 was highlighted by the conversion of all 27
restaurants to our financial tools within 60 days of acquisition. These tools
include the point-of-sale system and also implementation of our profitability,
and labor/payroll programs. Saltgrass' expansion will begin immediately with
two units in existing markets planned for 2003. Beyond 2003, opportunities
exist for further penetration of current markets and the development of new
markets.

   In addition to our acquisitions, we opened 14 restaurants in 2002. We have
increased our planned 2003 openings to between 25 and 30 units. Most of these
will be Joe's Crab Shack units, including the redevelopment of up to ten Chart
House and Muer restaurant locations.

                                      7

<PAGE>

   A designated team of our employees is 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 and other factors minimize our turnover 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.

   Our primary growth vehicle is the Joe's Crab Shack concept, although
additional restaurants in our other concepts will also be built. We believe
that the increased consumption of seafood due to its taste, variety and other
perceived health advantages supports the decision to continue the opening of
seafood restaurants.

   Our secondary growth vehicle is Saltgrass Steak House. The excellent unit
economics of our restaurants and clustered growth strategy support our decision
to concentrate our expansion efforts on quality restaurants in strategically
targeted markets.

   Additional growth will be achieved through our Specialty Growth Division and
possibly by future acquisitions, as we continue to offer a greater diversity of
entertainment choices that complement our core restaurant business.

Restaurant Locations

   Our 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 seafood restaurants generally have dining room floor seating for
approximately 215 customers and additional patio seating on a seasonal basis.
Saltgrass restaurants seat about 260 guests. Both formats offer bar seating for
approximately 10 to 20 additional customers.

   The Rainforest Cafe restaurants are larger, generally ranging 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, 2002:


<TABLE>
<CAPTION>
                               Number                   Number
                State         of Units State           of Units
                -----         -------- -----           --------
                <S>           <C>      <C>             <C>
                Alabama......     3    Missouri.......     4
                Arizona......     6    Nevada.........     6
                California...    22    New Jersey.....     5
                Colorado.....     8    New Mexico.....     1
                Connecticut..     1    New York.......     1
                Florida......    30    North Carolina.     3
                Georgia......     9    Ohio...........     9
                Illinois.....    10    Oklahoma.......     2
                Indiana......     5    Oregon.........     1
                Kansas.......     2    Pennsylvania...     3
                Kentucky.....     4    South Carolina.     8
                Louisiana....     4    Tennessee......     5
                Maryland.....     3    Texas..........    85
                Massachusetts     2    Utah...........     1
                Michigan.....    12    Virginia.......     6
                Minnesota....     3    Washington.....     1
                Mississippi..     1    Toronto, Canada     1

                                                         ---
                                       Total..........   267
                                                         ---
</TABLE>

                                      8

<PAGE>

   In addition, at year end, there were eight Chart House restaurants
operating, but scheduled for closure and redevelopment into Joe's Crab Shack
restaurants.

   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. 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 often made fresh on a daily basis
at each location. Many of our restaurants offer complimentary salad 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. Saltgrass Steak House offers a variety of Certified
Angus Beef, prime rib, pork ribs, fresh seafood, chicken and other Texas
cuisine favorites 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 a portion 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 generally
to higher unit level sales, larger facilities, more sophisticated 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 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

                                      9

<PAGE>

  .  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.

   As of December 31, 2002, there were approximately 95 individuals involved in
regional management functions generally performing on-site visits, formal
inspections and similar responsibilities. 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 successful experienced restaurant level management personnel to serve
as future regional managers.

   As of December 31, 2002, we employed approximately 23,000 persons, of whom
1,645 were restaurant managers or manager-trainees, 446 were salaried corporate
and administrative employees, approximately 95 were operations regional
management employees, 75 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, 2002, and may increase
seasonally by 30% or more in the summer months. Our restaurants generally
employ an average of approximately 60 to 100 people, depending again on
seasonal needs. The larger Rainforest Cafe restaurants generally have 160 to
200 employees on average, with certain larger volume units having in excess of
400 people on staff. We believe that our management level employee turnover for
2002 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, a 1-800-telephone number, and a
web-based customer response site, 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 product sizes,
species, and origins, 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 our primary distributors and 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, leverage our buying power, and hedge against
price and supply fluctuations. As we continue to grow, our ability to improve
our purchasing efficiencies will be enhanced.

                                      10

<PAGE>

   We believe that our essential food products and retail goods are available,
or can be made available upon relatively short notice, from alternative
qualified suppliers and distributors. We primarily use two national
distributors in order to achieve certain cost efficiencies, although 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. We are reviewing and analyzing alternative
distribution companies and strategies.

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
2002 were approximately 3.6% of revenues. We anticipate that advertising and
marketing expenses will moderate as a percentage of revenues and that we will
utilize more television and radio advertising.

Service Marks

   Landry's Seafood House, Joe's Crab Shack, Rainforest Cafe, Chart House and
Charley's Crab are each registered as a federal service mark on the Principal
Register of the United States Patent and Trademark Office. The Crab House and
Saltgrass Steak House are registered design marks. 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
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. Many of these competitors have a longer history of operations
with substantially greater financial resources. We also compete with other
restaurant and retail establishments for real estate sites and restaurant
personnel.

   Changes in customer tastes, economic conditions, demographic trends and the
location, number of, and type of food served by competing restaurants could
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.

   Other factors relating to our competitive position in the industry are
addressed under the sections entitled "Strategy," "Purchasing," and
"Advertising and Marketing" elsewhere in this report.

Rainforest International License and Joint Venture Agreements

   Rainforest Cafe has entered into exclusive license arrangements relating to
the operations and development of Rainforest Cafes in the United Kingdom,
Japan, France, Mexico, Canada. There are eight international units in
operation, including seven franchised units and one company owned and operated
unit in Toronto, Canada. Four international franchised units were closed
between 2002 and early 2003 due to declining sales and profitability. We own
various equity interests in several of the international locations, which were
included when we acquired Rainforest Cafe in 2000. We do not anticipate
revenues from international franchises to be significant.

                                      11

<PAGE>

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 complementary
merchandise to the general public through company-owned and company-operated
restaurants, substantially all located in the United States.

ITEM 2. PROPERTIES

Restaurant Locations

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

   Our corporate office in Houston, Texas 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

   Former shareholders, previously holding approximately 4,406,655 shares of
Rainforest Cafe, Inc. dissented to the merger between us and Rainforest Cafe.
Thereupon, Rainforest Cafe sent each dissenting shareholder a check in the
amount of $3.25 per share (Rainforest Cafe's estimate of fair value per share).
Subsequently, most of the dissenting shareholders made a demand for
supplemental payment based on their ascertation that the fair value per share
of common stock in the former Rainforest Cafe was more. We believe that our
estimate of fair value is correct, and that the dissenting shareholders'
estimate of fair value is significantly inflated. The appraisal trial has
concluded and the judge has ruled in our favor.

   In January 2002, Rainforest Cafe, Inc., our wholly-owned subsidiary, was
sued by EklecCo, L.L.C., in the Supreme Court of the State of New York in
Onondaga County. EklecCo is seeking damages, and costs as a result of
Rainforest Cafe's alleged breach of a restaurant lease entered into in 1996 for
a Rainforest Cafe unit formerly located in the Palisades Mall. Rainforest Cafe
believes that it has no liability for damages beyond the personal property
located in the premises at the time it vacated the premises. Rainforest Cafe is
defending this case vigorously. Because the case is in its early stages, the
financial impact to us, if any, cannot be predicted.

   On July 31, 2002, and subsequently amended, a purported collective action
lawsuit against us entitled Meaghan Bollenberg, et. al. v. Landry's
Restaurants, Inc. was filed in the United States District Court for the
Northern District of Illinois, and subsequently moved to the Southern District
of Texas Court. The lawsuit was filed by six plaintiffs who were servers on
behalf of themselves and others similarly situated. The lawsuit alleges that we
violated certain minimum wage laws under the federal Fair Labor Standards Act
and seeks damages and costs. We are vigorously defending this litigation.
Because the case is in its early stages, the financial impact to us, if any,
cannot be predicted.

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, 2002.


                                      12

<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 March 12, 2003, there were approximately 1,121 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>
                        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
                        2002
                           First Quarter.. $26.90 $18.00
                           Second Quarter.  29.10  22.45
                           Third Quarter..  25.51  17.55
                           Fourth Quarter.  24.90  17.80
</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, and renewed it April 2000, for an additional $36.0 million. These
programs have resulted in our aggregate repurchasing of approximately 10.1
million shares of common stock for approximately $85.5 million through December
31, 2002. In October 2002, we authorized a $50.0 million open market stock buy
back program.

                                      13

<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,
                                                                ------------------------------------------------------------
                                                                    2002         2001         2000         1999         1998
                                                                --------     --------     --------     --------     --------
<S>                                                             <C>          <C>          <C>          <C>          <C>
INCOME STATEMENT DATA
Revenues....................................................... $894,795     $746,642     $520,980     $438,986     $399,548
Operating costs and expenses:
   Cost of revenues............................................  257,945      219,684      156,787      136,321      121,082
   Restaurant labor............................................  259,198      215,662      147,192      125,566      107,976
   Other restaurant operating expenses.........................  222,711      185,186      122,099      101,563       86,319
   General and administrative expenses.........................   43,384       38,004       26,652       21,354       15,222
   Depreciation and amortization...............................   42,680 (1)   37,147 (1)   33,392 (1)   22,230       18,687
   Restaurant pre-opening expenses.............................    4,591        2,598        3,402        3,764       10,439 (2)
   Store closings and charges..................................       --           --        2,000 (3)    2,945 (3)   37,632 (3)
                                                                --------     --------     --------     --------     --------
      Total operating costs and expenses.......................  830,509      698,281      491,524      413,743      397,357
                                                                --------     --------     --------     --------     --------
Operating income...............................................   64,286       48,361       29,456       25,243        2,191
Other (income) expense:
   Interest (income) expense, net..............................    4,997        9,402        6,617        1,965       (1,625)
   Other, net..................................................     (887)         (56)         887         (178)        (843)
                                                                --------     --------     --------     --------     --------
      Total other (income) expense.............................    4,110        9,346        7,504        1,787       (2,468)
                                                                --------     --------     --------     --------     --------
Income before taxes & cumulative effect of accounting change...   60,176       39,015       21,952       23,456        4,659
Provision for income taxes.....................................   18,654       12,095        7,302        8,080        1,607
                                                                --------     --------     --------     --------     --------
Income before cumulative effect of accounting change...........   41,522       26,920       14,650       15,376        3,052
Cumulative effect of accounting change, net of tax (1998)......       --           --           --           --        3,382 (2)
                                                                --------     --------     --------     --------     --------
Net income..................................................... $ 41,522     $ 26,920     $ 14,650     $ 15,376     $   (330)
Net income before special charges, merger costs and accounting
 change........................................................ $ 41,522     $ 26,920     $ 20,301     $ 17,305     $ 27,701
                                                                ========     ========     ========     ========     ========
Earnings per share information:
Basic
   Net income before cumulative effect of accounting change.... $   1.60     $   1.24     $   0.63     $   0.58     $   0.10
   Cumulative effect of accounting change, net of tax..........       --           --           --           --        (0.11)
                                                                --------     --------     --------     --------     --------
   Net income (loss)........................................... $   1.60     $   1.24     $   0.63     $   0.58     $  (0.01)
                                                                ========     ========     ========     ========     ========
   Net income before special charges, merger costs and
    accounting change.......................................... $   1.60     $   1.24     $   0.87     $   0.65     $   0.94
                                                                ========     ========     ========     ========     ========
   Average number of common shares outstanding.................   25,900       21,750       23,400       26,675       29,400
Diluted........................................................
   Net income before cumulative effect of accounting change.... $   1.54     $   1.19     $   0.62     $   0.57     $   0.10
   Cumulative effect of accounting change, net of tax..........       --           --           --           --        (0.11)
                                                                --------     --------     --------     --------     --------
   Net income (loss)........................................... $   1.54     $   1.19     $   0.62     $   0.57     $  (0.01)
                                                                ========     ========     ========     ========     ========
   Net income before special charges, merger costs and
    accounting change.......................................... $   1.54     $   1.19     $   0.86     $   0.64     $   0.93
                                                                ========     ========     ========     ========     ========
   Weighted average number of common shares and equivalents
    outstanding................................................   26,900       22,535       23,600       27,025       29,900

BALANCE SHEET DATA (AT END OF PERIOD)
Working capital (deficit)...................................... $(55,685)    $ (6,017)    $(39,657)(4) $ 17,430     $ 43,960
Total assets...................................................  933,015      690,171      663,875      496,726      489,949
Short-term notes payable and current portion of long-term notes
 and other obligations.........................................    1,783           --           60           93           82
Long-term notes and other obligations, noncurrent..............  189,404      175,000      155,000       68,060       35,153
Stockholders' equity........................................... $567,075     $393,671     $364,553     $377,348     $408,672
</TABLE>

                                      14

<PAGE>

--------
(1) In 2002, 2001 and 2000, we recorded asset impairment charges of $2.2
    million ($1.5 million after tax), $2.4 million ($1.6 million after tax) and
    $6.3 million ($4.3 million after tax), respectively, related to the
    adjustment to estimated fair value of certain restaurant properties.
(2) During 1998, we adopted a new accounting rule 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 failed offer to acquire Rainforest
    Cafe. We incurred $2.9 million in store closings and special charges during
    1999, which comprised the net result of $3.7 million in transaction costs
    as the result of a terminated merger agreement with another company during
    the first quarter of 1999, and the reversal of an accrual (income) of $0.7
    million related to favorable lease settlement 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 1998 charges provided
    an estimated income tax benefit of $13.0 million, and were the result of
    our decision during the fourth quarter of 1998 to close eleven
    underperforming restaurants and incur significant changes in the strategic
    growth plan.
(4) Amount includes accrued costs of $44.4 million attributable to our
    acquisition payable liabilities 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, 2002, we operated 267 restaurants. In addition to these units, there were
eight Chart House restaurants operating but scheduled for closure and
redevelopment into Joe's Crab Shack restaurants.

   In February 2002, we acquired 15 seafood restaurants located primarily in
Michigan and Florida resulting from the acquisition of C.A. Muer, Inc., (the
"Muer Acquisition"). In August 2002, we purchased 27 Chart House seafood
restaurants, located primarily on the East and West Coasts of the United
States. Both of these acquisitions included plans for the redevelopment of 10
additional lower profitability restaurants, also then acquired, into Joe's Crab
Shack restaurants, and the sale or disposal of six additional acquired, but
non-strategic, locations. In October 2002, we purchased 27 Texas-based
Saltgrass Steak House restaurants.

   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.

                                      15

<PAGE>

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,
                                                ----------------------
                                                 2002    2001    2000
                                                -----   -----   -----
            <S>                                 <C>     <C>     <C>
            Revenues........................... 100.0%  100.0%  100.0%
            Cost of revenues...................  28.8    29.4    30.1
            Restaurant labor...................  29.0    28.9    28.3
            Other restaurant operating expenses  24.9    24.8    23.4
                                                -----   -----   -----
            Restaurant level profit............  17.3%   16.9%   18.2%
                                                =====   =====   =====
</TABLE>

  Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

   Revenues increased $148,152,334, or 19.8%, from $746,642,287 to $894,794,621
for the year ended December 31, 2002, compared to the year ended December 31,
2001. The increase in revenues was primarily attributable to revenues from new
restaurant openings, a same store sales increase of 1.6% for the Company's
seafood restaurants, offset by a slight decline in Rainforest Cafe restaurant
revenues, and the inclusion of 2002 revenues from the Muer (since February
2002), Chart House (since August 2002) and Saltgrass Steak House restaurants
(since October 2002) acquisitions. The Company's same store sales declined in
the fourth quarter of 2002, and management believes that comparisons for the
first quarter of 2003 may be rather difficult in light of excellent prior year
comparative same store sales results, unfavorable weather and a more difficult
and competitive economic environment.

   As a primary result of increased revenues, cost of revenues increased
$38,261,051, or 17.4%, from $219,683,690 to $257,944,741 in the year ended
December 31, 2002, compared to the prior year. Cost of revenues as a percentage
of revenues for the year ended December 31, 2002 decreased to 28.8% from 29.4%
in 2001. The decrease in cost of revenues as a percentage of revenues primarily
reflects menu changes and lower product costs in 2002 as compared to 2001,
partially offset by the inclusion of Saltgrass Steak House restaurants (since
October 2002) with higher than Company average cost of sales margins.

   Restaurant labor expenses increased $43,535,944, or 20.2%, from $215,662,020
to $259,197,964 in the year ended December 31, 2002, compared to the prior
year. Restaurant labor expenses as a percentage of revenues for the year ended
December 31, 2002, increased to 29.0% from 28.9% in 2001, as a primary result
of higher labor costs at the restaurants purchased in recent acquisitions,
partially offset by increases in hourly labor productivity.

   Other restaurant operating expenses increased $37,524,400, or 20.3%, from
$185,186,106 to $222,710,506 in the year ended December 31, 2002, compared to
the prior year, principally as a result of increased revenues. Such expenses
increased as a percentage of revenues to 24.9% in 2002 from 24.8% in 2001, as a
primary result of higher marketing and advertising expenses, partially offset
by lower utility costs.

   General and administrative expenses increased $5,380,311, or 14.2%, from
$38,003,488 to $43,383,799 in the year ended December 31, 2002, compared to the
prior year, and declined as a percentage of revenues to 4.8% in 2002 from 5.1%
in 2001. The dollar increase resulted primarily from increased personnel to
support our expanded operations. The decrease as a percentage of revenues is
the primary result of increased leverage from higher revenues increasing more
than expenses.

   Depreciation and amortization expense increased $5,532,695, or 14.9%, from
$37,147,325 to $42,680,020 in the year ended December 31, 2002, compared to the
prior year. The dollar increase was primarily due to the addition of new
restaurants and equipment and the restaurant acquisitions in 2002, and asset
impairment charges of $2,200,000 in 2002, compared to $2,394,000 in 2001.

                                      16

<PAGE>

   The decrease in net interest expense for the year ended December 31, 2002,
as compared to the prior year, is substantially due to reduced borrowings as a
result from repayments using proceeds of a secondary stock offering we
completed in April 2002. Also, the average borrowing rate declined by
approximately 1.3 percentage points between December 31, 2001 to December 31,
2002. The change in other expense (income), includes an unrealized gain on
investments of $875,000, and additional income of $1,100,000 from a settlement
from a vendor, offset by a loss of $1,500,000 on an asset in 2002.

   Provision for income taxes increased by $6,558,908 to $18,654,638 in 2002
from $12,095,730 in 2001 primarily due to changes in our pre-tax income.

  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.

   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

                                      17

<PAGE>

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.

  Liquidity and Capital Resources

   In February 2002, we completed our acquisition of C.A. Muer Restaurants,
Inc. for approximately $28 million, which was funded with borrowings from our
credit line. In April 2002, we completed a public offering of 5,297,500 shares
of common stock and raised approximately $132.6 million. These proceeds were
initially used to pay down the majority of amounts outstanding on our credit
line. In August 2002, we acquired 27 Chart House restaurants and additional
restaurant locations for $45 million, plus assumptions of trade payables, which
was funded with borrowings from our credit line. In October 2002, we purchased
the 27-unit Saltgrass Steak House and seafood chain for approximately $73
million. The acquisition was financed by borrowing on the credit facility and a
$20 million, 7 year, 5.5% note from the seller. In October 2002, we authorized
a $50.0 million open market stock buy back program. Our $220.0 million line of
credit from a syndicate of banks matures in July 2004 and is available for
expansion, acquisitions, share repurchases and other general corporate
purposes. In July 2002, the credit line was amended to permit the Chart House
and Saltgrass acquisitions. At December 31, 2002, we had $171.0 million
outstanding under this credit facility at an average interest rate of 3.7%, and
remaining availability of approximately $41.3 million.

   For the year ended December 31, 2002, we funded our capital expenditures of
$115.9 million and $146.5 million in acquired restaurant properties (Muer,
Chart House and Saltgrass Steak House restaurants), out of existing cash
balances, cash flows from operations, and borrowings.

   We expect to spend approximately $120 to $130 million on capital
expenditures in 2003. The majority of planned capital expenditures will be for
restaurants that are expected to open in 2003 and 2004, which include
approximately 25 to 30 restaurants in 2003, although a portion will be for land
purchases, other entertainment and hospitality opportunities, and the
completion of our Downtown Aquarium project in Houston, Texas. In addition, we
are renovating a building adjacent to the new Houston professional baseball
park and close to the Houston Convention Center, into a 200-room hotel as a
part of our specialty growth opportunities. Expected construction costs of
approximately $25 million will be expended over several years. Further, we were
awarded a contract from the City of Galveston, Texas to develop, construct and
operate the Galveston Island Convention Center. The estimated construction
costs are being funded by proceeds from governmental agency bonds issued by the
City of Galveston and serviced by certain taxes. Under the agreements, we have
the right to one-half of the profits of the Convention Center. Our estimated
costs of these projects are included in our projected capital expenditures.

   We plan to fund 2003 capital expenditures and any additional restaurant
acquisitions out of proceeds from 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.

   Since April 2000 we have paid an annual $0.10 per share dividend, declared
and paid in quarterly amounts.

   From time to time we 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, 2003.

  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 restaurants tend to

                                      18

<PAGE>

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, which occurred in the fourth quarter of
2002 and is expected to occur in the first quarter of 2003. The timing of unit
openings can and will affect quarterly results.

  Critical Accounting Policies

   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, and are included in other current
assets.

   The Company follows the intrinsic value method of accounting for stock
options, and as such does not record compensation expense related to amounts
outstanding.

  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 increases in federal minimum
wages, land and construction costs could adversely affect our profitability and
ability to expand.

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, 2002, included $171.0 million of floating-rate
debt attributed to a bank syndicated line of credit at an average interest rate
of 3.7%. The floating-rate debt will mature in July 2004. As a result, our
annual interest cost in 2003 will fluctuate based on short-term interest rates
and may be subject to an increase if we elect to refinance our obligations on a
longer term fixed rate basis. The impact on annual cash flow of a ten percent
change in the floating rate (approximately 0.4%) would be approximately $0.6
million annually based on the floating-rate debt outstanding at December 31,
2002, however, there are no assurances that possible rate changes would be
limited to such amounts. At December 31, 2002, our floating-rate debt had a
book value and a fair market value of $171.0 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The financial statements are set forth commencing on page 25.

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

   During the fiscal years 2000 and 2001 there were no changes in our
independent public accountants, nor were there any disagreements with such
accountants, and no reportable events occurred. In 2002, the Company reported
that it had retained Ernst & Young LLP to replace Arthur Andersen LLP. Ernst &
Young LLP remains the Company's independent auditor through the date of this
report. There are no disagreements with Ernst & Young LLP, and no reportable
events occurred.


                                      19

<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, 2002.

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, 2002.


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, 2002.

Equity Compensation Plan Information

   The following table provides information as of December 31, 2002 regarding
the number of shares of Common Stock that may be issued under the Company's
equity compensation plans.

<TABLE>
<CAPTION>
                                                                                        Number of securities
                                          Number of securities                        remaining available for
                                           to be issued upon     Weighted average   future issuance under equity
                                              exercise of       exercise price of        compensation plans
                                          outstanding options, outstanding options,    (excluding securities
              Plan Category               warrants and rights  warrants and rights    reflected in column (a))
              -------------               -------------------- -------------------- ----------------------------
                                                  (a)                  (b)                      (c)
<S>                                       <C>                  <C>                  <C>
Equity compensation plans approved by the
  stockholders...........................      1,034,835              $ 8.83                        --
Equity compensation plans not approved by
  the stockholders (1)...................      1,659,635              $13.20                 1,300,000
                                               ---------              ------                 ---------
       Total.............................      2,694,470              $11.57                 1,300,000
                                               =========              ======                 =========
</TABLE>
--------
(1) We have the following compensation plans under which awards have been
    issued or are authorized to be issued, which were adopted without
    stockholder approval:

   (a) The Landry's Restaurants, Inc. 2002 Employee/Rainforest Conversion Plan
       authorizes the issuance of up to 2,162,500 shares, all of which are
       currently held in our treasury. This plan allows awards of non-qualified
       stock options, which may include stock appreciation rights, to our
       consultants, employees and non-employee directors. The plan is
       administered by our compensation committee. Terms of the award, such as
       vesting and exercise price, are to be determined by the compensation
       committee and set forth in the grant agreement for each award.
   (b) On July 22, 2002, we issued options to purchase an aggregate of 437,500
       shares under individual stock option agreements with individual members
       of senior management. Options under these agreements were granted at
       market price and expire ten years from the date of grant. These options
       vest in equal installments over a period of five years, provided that
       vesting may accelerate on certain occurrences,

                                      20

<PAGE>

       such as a change in control or, in the case of options granted to our
       CEO, if our stock hits certain price targets.
   (c) On July 22, 2002, we issued options to purchase an aggregate of 6,000
       shares to our non-employee directors. Options under these agreements
       were granted at market price and expire ten years from the date of
       grant. These options vest in equal installments over a period of five
       years.
   (d) On March 16, 2001, we issued options to purchase an aggregate of 387,500
       shares to our senior management under individual stock option agreements
       with individual members of senior management. Options under these
       agreements were granted at market price and expire ten years from the
       date of grant. These options vest in equal installments over a period of
       five years, provided that vesting may accelerate on certain occurrences,
       such as a change in control or, in the case of options granted to our
       CEO, if our stock hits certain price targets.
   (e) On March 16 and September 13, 2001, options to purchase an aggregate of
       240,000 shares were issued to certain of our individual employees, under
       individual option grant agreements. Options under these agreements were
       granted at market price and expire ten years from the date of grant.
       These options vest in equal installments over a period of five years,
       provided that vesting may accelerate on certain occurrences, such as a
       change in control.
   (f) On April 27, 1995, Landry's issued options to purchase an aggregate of
       600,000 shares under an individual stock option agreement with Landry's
       President and CEO. Options under the agreement were granted at market
       price and expire ten years from the date of grant. These options vested
       in equal installments over a period of three years.

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, 2002.

                                      21

<PAGE>

                                    PART IV

ITEM 14. CONTROLS AND PROCEDURES

   Within 90 days prior to the date of this Report, we carried out an
evaluation under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic
SEC reports. It should be noted that the design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how remote.
In addition, we reviewed our internal controls, and there have been no
significant changes in our internal controls or in other factors that could
significantly affect those controls subsequent to the date of their last
evaluation.

ITEM 15. 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 23:

        --Report of Independent Auditors

        --Consolidated Balance Sheets as of December 31, 2002 and 2001

        --Consolidated Statements of Income for the years ended December 31,
        2002, 2001 and 2000

        --Consolidated Statements of Stockholders' Equity for the years ended
          December 31, 2002, 2001 and 2000

        --Consolidated Statements of Cash Flows for the years ended December
          31, 2002, 2001 and 2000

        --Notes to Consolidated Financial Statements

      2. Financial Statement Schedules--Not applicable.

   (b) Reports on Form 8-K

        --On October 4, 2002, we filed an 8-K Report, reporting on Item 5, on
          acquisition of the Saltgrass Steak House restaurants.

   (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.

                                      22

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of Landry's Restaurants, Inc.

We have audited the consolidated balance sheet of Landry's Restaurants, Inc.
and Subsidiaries as of December 31, 2002, and the consolidated statement of
income, stockholders' equity, and cash flows for the year then ended. 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 audit. The financial statements of Landry's Restaurants, Inc. and
Subsidiaries as of December 31, 2001, and 2000, and for the years then ended
were audited by other auditors who have ceased operations and whose report
dated February 4, 2002, expressed an unqualified opinion on those statements.

We conducted our audit 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 audit provides a reasonable basis
for our opinion.

In our opinion, the 2002 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Landry's
Restaurants, Inc. and Subsidiaries at December 31, 2002 and the consolidated
results of its operations and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States.

ERNST & YOUNG LLP

Houston, Texas
February 11, 2003
(Except with respect to the matter discussed in Note 7 as to which the date is
March 26, 2003)

                                      23

<PAGE>

Note: The report of Arthur Andersen LLP presented below is a copy of a
previously issued Arthur Andersen LLP report and said report has not been
reissued by Arthur Andersen LLP nor has Arthur Andersen LLP provided a consent
to the inclusion of its report on this Form 10-K.

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Landry's Restaurants, Inc.:

We have audited the accompanying consolidated balance sheet of Landry's
Restaurants, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2001 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 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)

                                      24

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                            -------------------------
                                                                                2002         2001
                                                                            ------------ ------------
<S>                                                                         <C>          <C>
                                  ASSETS
CURRENT ASSETS:
   Cash and cash equivalents............................................... $ 13,878,199 $ 31,081,008
   Accounts receivable--trade and other....................................   19,910,006   13,518,828
   Inventories.............................................................   40,879,375   33,562,608
   Deferred taxes..........................................................    6,227,519    5,621,459
   Other current assets....................................................   11,774,016   10,336,996
                                                                            ------------ ------------
       Total current assets................................................   92,669,115   94,120,899
                                                                            ------------ ------------
PROPERTY AND EQUIPMENT, net................................................  830,930,131  587,828,723
GOODWILL...................................................................    2,434,547    2,438,996
OTHER ASSETS, net..........................................................    6,981,286    5,782,578
                                                                            ------------ ------------
       Total assets........................................................ $933,015,079 $690,171,196
                                                                            ============ ============

                   LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable........................................................ $ 71,748,874 $ 45,027,820
   Accrued liabilities.....................................................   74,237,570   55,109,685
   Income taxes payable....................................................      584,531           --
   Current portion of long-term notes and other obligations................    1,783,427           --
                                                                            ------------ ------------
       Total current liabilities...........................................  148,354,402  100,137,505
                                                                            ------------ ------------
LONG-TERM NOTES, NET OF CURRENT PORTION....................................  189,403,599  175,000,000
DEFERRED TAXES.............................................................   11,540,594    4,126,948
OTHER LIABILITIES..........................................................   16,641,047   17,236,120
                                                                            ------------ ------------
       Total liabilities...................................................  365,939,642  296,500,573
                                                                            ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
   Common Stock, $0.01 par value, 60,000,000 shares authorized, 27,771,479
     and 21,996,369 issued and outstanding, respectively...................      277,715      219,964
   Additional paid-in capital..............................................  441,338,043  305,598,659
   Retained earnings.......................................................  125,459,679   87,852,000
                                                                            ------------ ------------
       Total stockholders' equity..........................................  567,075,437  393,670,623
                                                                            ------------ ------------
       Total liabilities and stockholders' equity.......................... $933,015,079 $690,171,196
                                                                            ============ ============
</TABLE>

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


                                      25

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                       CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                ----------------------------------------
                                                    2002          2001          2000
                                                ------------  ------------  ------------
<S>                                             <C>           <C>           <C>
REVENUES....................................... $894,794,621  $746,642,287  $520,979,796
OPERATING COSTS AND EXPENSES:
   Cost of revenues............................  257,944,741   219,683,690   156,786,917
   Restaurant labor............................  259,197,964   215,662,020   147,192,415
   Other restaurant operating expenses.........  222,710,506   185,186,106   122,098,633
   General and administrative expenses.........   43,383,799    38,003,488    26,652,446
   Depreciation and amortization...............   42,680,020    37,147,325    33,391,788
   Restaurant pre-opening expenses.............    4,590,972     2,598,293     3,401,511
   Store closings and special charges..........           --            --     2,000,000
                                                ------------  ------------  ------------
       Total operating costs and expenses......  830,508,002   698,280,922   491,523,710
OPERATING INCOME...............................   64,286,619    48,361,365    29,456,086
OTHER EXPENSE (INCOME):
   Interest expense, net.......................    4,997,022     9,402,351     6,617,567
   Other, net..................................     (886,657)      (56,285)      886,573
                                                ------------  ------------  ------------
                                                   4,110,365     9,346,066     7,504,140
INCOME BEFORE INCOME TAXES.....................   60,176,254    39,015,299    21,951,946
PROVISION FOR INCOME TAXES.....................   18,654,638    12,095,730     7,301,828
                                                ------------  ------------  ------------
NET INCOME..................................... $ 41,521,616  $ 26,919,569  $ 14,650,118
                                                ============  ============  ============
EARNINGS PER SHARE INFORMATION:
BASIC
   Net income.................................. $       1.60  $       1.24  $       0.63
   Average number of common shares outstanding.   25,900,000    21,750,000    23,400,000
DILUTED........................................
   Net income.................................. $       1.54  $       1.19  $       0.62
   Average number of common and common share
     equivalents outstanding...................   26,900,000    22,535,000    23,600,000
</TABLE>


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


                                      26

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                          Common Stock
                                      --------------------
                                                              Additional      Retained
                                        Shares     Amount   Paid-In Capital   Earnings        Total
                                      ----------  --------  --------------- ------------  ------------
<S>                                   <C>         <C>       <C>             <C>           <C>
BALANCE, January 1, 2000............. 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
     for 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
     for 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
   Net income........................         --        --             --     41,521,616    41,521,616
   Dividends paid....................         --        --             --     (2,500,387)   (2,500,387)
   Issuance of common stock, net.....  5,297,500    52,975    132,524,341             --   132,577,316
   Purchase of common stock held
     for treasury....................   (304,904)   (3,049)    (5,317,638)    (1,413,550)   (6,734,237)
   Exercise of stock options and tax
     benefit.........................    782,514     7,825      8,532,681             --     8,540,506
                                      ----------  --------   ------------   ------------  ------------
BALANCE, December 31, 2002........... 27,771,479  $277,715   $441,338,043   $125,459,679  $567,075,437
                                      ==========  ========   ============   ============  ============
</TABLE>

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

                                      27

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                            -------------------------------------------
                                                                 2002           2001           2000
                                                            -------------  -------------  -------------
<S>                                                         <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income................................................ $  41,521,616  $  26,919,569  $  14,650,118
 Adjustments to reconcile net income to net cash provided
   by operating activities:
   Gain on sales of assets.................................      (154,957)      (565,822)            --
   Depreciation and amortization...........................    42,680,020     37,147,325     33,391,788
   Deferred rent and other charges (income)................       541,874       (241,155)      (413,988)
   Changes in assets and liabilities:
     (Increase) decrease in trade and other receivables....    (3,826,716)    (2,865,441)     4,364,595
     (Increase) decrease in inventories....................    (4,044,169)     1,189,511     (7,758,689)
     (Increase) decrease in other assets...................    (7,316,003)     8,977,078     11,234,860
     Increase (decrease) in accounts payable and accrued
       liabilities.........................................    42,236,086     18,410,181      9,866,444
                                                            -------------  -------------  -------------
   Total adjustments.......................................    70,116,135     62,051,677     50,685,010
                                                            -------------  -------------  -------------
       Net cash provided by operating activities...........   111,637,751     88,971,246     65,335,128
CASH FLOWS FROM INVESTING ACTIVITIES:
 Property and equipment additions..........................  (115,903,544)   (73,462,974)   (77,569,028)
 Proceeds from sale of property and equipment..............     2,097,870        750,000             --
 Business acquisitions, net of cash acquired...............  (161,108,095)   (32,580,607)   (44,562,492)
                                                            -------------  -------------  -------------
       Net cash used in investing activities...............  (274,913,769)  (105,293,581)  (122,131,520)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from sale of common stock........................   132,577,316             --             --
 Purchases of common stock.................................    (6,734,237)       (76,404)   (25,680,919)
 Proceeds from exercise of stock options...................     7,134,631      3,548,144             --
 Borrowings (payments) under credit line and notes payable,
   net.....................................................    15,595,886     19,940,037     86,907,083
 Dividends paid............................................    (2,500,387)    (2,167,959)    (1,764,579)
 Other.....................................................            --             --        516,666
                                                            -------------  -------------  -------------
       Net cash provided by financing activities...........   146,073,209     21,243,818     59,978,251
NET INCREASE (DECREASE) IN CASH AND
  EQUIVALENTS..............................................   (17,202,809)     4,921,483      3,181,859
CASH AND CASH EQUIVALENTS AT BEGINNING OF
  YEAR.....................................................    31,081,008     26,159,525     22,977,666
                                                            -------------  -------------  -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR................... $  13,878,199  $  31,081,008  $  26,159,525
                                                            =============  =============  =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
Cash paid during the period for:
   Interest................................................ $   5,567,196  $  10,230,853  $   7,692,000
   Income taxes............................................ $   8,689,374  $          --  $   2,312,000
</TABLE>

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


                                      28

<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 of Landry's Seafood House, Joe's
Crab Shack, The Crab House, Charley's Crab, The Chart House and Saltgrass Steak
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.

   The Company adopted SFAS No. 141, "Business Combinations". SFAS No. 142,
"Goodwill and Other Intangible Assets" and adopted SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets." These pronouncements did
not have a material effect on the Company's financial statements. The Company
follows the intrinsic value method of accounting for stock options, and as such
does not record compensation expense related to amounts outstanding.

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,
                                     -----------------------
                                        2002        2001
                                     ----------- -----------
                   <S>               <C>         <C>
                   Food and beverage $29,124,594 $24,162,722
                   Retail goods.....  11,754,781   9,399,886
                                     ----------- -----------
                                     $40,879,375 $33,562,608
                                     =========== ===========
</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 generally as follows:
buildings and improvements--5 to 40 years; furniture, fixtures and equipment--5
to 15 years; and leasehold improvements--shorter of 30 years or lease term,
including extensions where appropriate.

                                      29

<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 2002, 2001 and
2000, the Company capitalized interest costs of approximately $1,959,000,
$2,437,000, and $1,650,000, respectively.

   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, and are included in other current
assets.

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 related indirect costs of the
construction department, 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, projects, and general site selection
costs which cannot be identified with specific restaurants are charged to
operations.

Advertising

   Advertising costs are expensed as incurred during such year. Advertising
expenses were $32.1 million, $21.9 million and $10.9 million in 2002, 2001 and
2000, respectively.

Goodwill

   Goodwill and intangible assets with indefinite lives are not amortized, but
instead tested for impairment at least annually. Other tangible 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

   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, and are the only such
equivalents outstanding.

                                      30

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


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, 2002, the Company operated 267 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.

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. ACQUISITIONS

   In February 2002, the Company acquired C.A. Muer, Inc. the owner and
operator of 15 seafood restaurants ("Muer Acquisition") in a stock purchase
transaction for approximately $28.5 million. In August 2002, the Company
acquired, in an asset purchase transaction, 27 Chart House seafood restaurants
located primarily on the East and West coasts of the United States from Angelo
and Maxie's, Inc. for approximately $45.5 million, as well as assumption of
selected trade payable related liabilities. Both of these acquisitions included
plans for the redevelopment of 10 additional lower profitability restaurants,
also then acquired, into Joe's Crab Shacks concept seafood restaurants, as well
as the sale or disposal of six acquired but non-strategic locations. In October
2002, the Company acquired 27 Saltgrass Steak House restaurants in a stock
purchase transaction for approximately $73.0 million which included a $20
million promissory note issued by the seller. The Saltgrass acquisition
provides for future contingent payments based on the financial performance of
the acquired restaurants and a limited number of future restaurants. As such
contingency payments have not been earned, no amounts have been accrued. Any
related incentive payment is expected to require financial performance of the
acquired business to be well in excess of historical financial performance. The
noted above acquisitions are accounted for under SFAS 141 and results of
operations are included in the accompanying financial statements from the date
of acquisition.

   The assets acquired and liabilities assumed of the acquired businesses were
recorded at estimated fair values as determined by the Company's management and
using relevant comparables, appraisals, and records. The preliminary allocation
of the Muer purchase price was revised by $5.8 million based on additional
information. These purchase price allocations are subject to revision within
the next year based on the final determination of fair values.

   On October 28, 2000, the Company acquired a majority ownership in Rainforest
Cafe. On December 1, 2000, the Company completed the 100% merger of a
Company-owned subsidiary into Rainforest Cafe with Rainforest Cafe as the
surviving corporation. The aggregate purchase price for outstanding shares was
approximately $70 million, which was provided primarily from the Company's
existing bank credit facility. The aggregate purchase price includes payments
to dissenting shareholders in 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
preliminary allocation of the purchase price was revised by $8.4 million based
on the final determination of fair values.

                                      31

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   A summary of the assets acquired and liabilities assumed in the acquisitions
follows (in 000's):

<TABLE>
<CAPTION>
                                                                           2000
                                               2002 Acquisitions        Acquisition
                                        ------------------------------  -----------
                                                                        Rainforest
                                          Muer    Chart House Saltgrass    Cafe
                                        --------  ----------- --------- -----------
<S>                                     <C>       <C>         <C>       <C>
Estimated fair value of assets acquired $ 45,431    $56,721   $ 83,524   $139,650
Liabilities assumed....................  (16,883)    (5,281)   (10,063)   (60,244)
                                        --------    -------   --------   --------
Allocated purchase price...............   28,548     51,440     73,461     79,406
   Less cash acquired and seller note..     (895)      (163)   (21,200)   (19,615)
                                        --------    -------   --------   --------
Net cash paid.......................... $ 27,653    $51,277   $ 52,261   $ 59,791
                                        ========    =======   ========   ========
</TABLE>

   The Company has disputes with one or more parties and believes that purchase
price reductions are appropriate and due.

   As a result of the acquisitions, 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 the
acquired business 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. Acquisition integration for the 2002 acquisitions aggregated
$6.9 million of which most liabilities were paid in 2002.

   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. Such adjustments did not affect the Company's
consolidated income. Accrued merger costs as of December 31, 2001, related to
the Rainforest Cafe acquisition were paid in 2002.

3. PROPERTY AND EQUIPMENT AND OTHER ASSETS

   Property and equipment is comprised of the following:

<TABLE>
<CAPTION>
                                                  December 31,
                                          ----------------------------
                                               2002           2001
                                          -------------  -------------
        <S>                               <C>            <C>
        Land............................. $ 138,379,047  $ 100,924,886
        Buildings and improvements.......   195,445,593    152,594,344
        Furniture, fixtures and equipment   179,119,008    153,184,645
        Leasehold improvements...........   398,384,738    290,614,126
        Construction in progress.........    86,968,286     23,463,382
                                          -------------  -------------
                                            998,296,672    720,781,383
        Less--accumulated depreciation...  (167,366,541)  (132,952,660)
                                          -------------  -------------
        Property and equipment, net...... $ 830,930,131  $ 587,828,723
                                          =============  =============
</TABLE>

                                      32

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The Company continually evaluates unfavorable cash flows, if any, related to
under performing restaurants. Periodically it is concluded that certain
properties have become 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 $2,200,000, $2,394,000 and $6,292,000 in 2002, 2001 and 2000,
respectively, 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 are comprised of the following:

<TABLE>
<CAPTION>
                                            December 31,
                                       -----------------------
                                          2002        2001
                                       ----------- -----------
                 <S>                   <C>         <C>
                 Prepaid expenses..... $ 4,439,300 $ 3,158,247
                 Assets held for sale.   3,585,925   5,114,291
                 Marketable securities   2,752,979          --
                 Deposits.............     995,812   2,064,458
                                       ----------- -----------
                                       $11,774,016 $10,336,996
                                       =========== ===========
</TABLE>

   Other income during 2002 includes additional income of $1,100,000 from a
settlement from a vendor and $875,000 in unrealized gains on marketable
securities classified as trading offset by a loss of $1,500,000 on an asset
held for sale.

4. ACCRUED LIABILITIES

   Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                                                    December 31,
                                                               -----------------------
                                                                  2002        2001
                                                               ----------- -----------
<S>                                                            <C>         <C>
Payroll and related costs..................................... $14,708,991 $14,137,640
Rent, insurance and taxes, other than payroll and income taxes  36,628,732  24,845,811
Deferred revenue (gift certificates)..........................   9,085,304   2,252,775
Accruals for acquisitions (Note 2)............................     591,624   3,569,111
Other.........................................................  13,222,919  10,304,348
                                                               ----------- -----------
                                                               $74,237,570 $55,109,685
                                                               =========== ===========
</TABLE>

5. DEBT

   As of December 31, 2002, the Company had a $220.0 million credit line from a
syndicate of 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 3.7% at December
31, 2002). The Company's financing spread is presently 2.0% for Libor, and
0.25% 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

                                      33

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

December 31, 2002, the Company had $7.7 million in trade letters of credit and
$41.3 million available for borrowing under the credit line.

   In connection with the Saltgrass Steak House acquisition in October 2002,
the Company financed a portion of the acquisition with a $20 million, 7 year,
5.5% note from the former owner of Saltgrass Steak House. At December 31, 2002
the Company had $19,622,000 outstanding under the Saltgrass seller note, which
matures on September 30, 2009. Principal payments under the promissory note
aggregate $1,567,000 in 2003, $1,654,000 in 2004, $1,747,000 in 2005,
$1,845,000 in 2006, $1,949,000 in 2007 and $10,861,000 thereafter (through
2009).

   Interest expense (income), net includes the following:

<TABLE>
<CAPTION>
                                     Year Ended December 31,
                               ----------------------------------
                                  2002        2001        2000
                               ----------  ----------  ----------
              <S>              <C>         <C>         <C>
              Interest expense $5,133,219  $9,685,201  $7,180,597
              Interest income    (136,197)   (282,850)   (563,030)
                               ----------  ----------  ----------
                               $4,997,022  $9,402,351  $6,617,567
                               ==========  ==========  ==========
</TABLE>

6. INCOME TAXES

   An analysis of the provision for income taxes for the years ended December
31, 2002, 2001, and 2000 is as follows:

<TABLE>
<CAPTION>
                                        2002        2001        2000
                                     ----------- ----------- ----------
         <S>                         <C>         <C>         <C>
         Tax Provision:
            Current income taxes.... $ 9,939,230 $ 3,266,954 $  280,564
            Deferred income taxes...   8,715,408   8,828,776  7,021,264
                                     ----------- ----------- ----------
                Total provision..... $18,654,638 $12,095,730 $7,301,828
                                     =========== =========== ==========
</TABLE>

   The Company's effective tax rate, for the years ended December 31, 2002,
2001, and 2000, differs from the federal statutory rate as follows:

<TABLE>
<CAPTION>
                                                      2002  2001  2000
                                                      ----  ----  ----
         <S>                                          <C>   <C>   <C>
         Statutory rate.............................. 35.0% 35.0% 35.0%
         FICA tax credit............................. (6.6) (7.3) (7.7)
         State income tax, net of federal tax benefit  1.2   0.6   1.1
         Other.......................................  1.4   2.7   4.9
                                                      ----  ----  ----
                                                      31.0% 31.0% 33.3%
                                                      ====  ====  ====
</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.

   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.

                                      34

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


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

<TABLE>
<CAPTION>
                                                         2002          2001
                                                     ------------  ------------
<S>                                                  <C>           <C>
Deferred Income Taxes:
 Current assets--accruals and other................. $  6,228,000  $  5,621,000
                                                     ------------  ------------
 Non-current assets:
   AMT credit, FICA credit carryforwards, and other. $ 21,128,000  $ 19,785,000
   Net operating loss carryforwards.................   28,633,000    18,743,000
   Valuation allowance for carryforwards............  (28,239,000)  (21,255,000)
                                                     ------------  ------------
   Non-current deferred tax asset...................   21,522,000    17,273,000
 Non-current liabilities--property and other........  (33,063,000)  (21,400,000)
                                                     ------------  ------------
   Net non-current tax asset (liability)............ $(11,541,000) $ (4,127,000)
                                                     ------------  ------------
       Total net deferred tax asset (liability)..... $ (5,313,000) $  1,494,000
                                                     ============  ============
</TABLE>

   At December 31, 2002, the Company had operating loss carryovers for Federal
Income Tax purposes of $81.8 million, which expire in 2011 through 2023. These
operating loss carryovers, and certain other deductible temporary differences,
are related to the acquisitions of Rainforest Cafe and Saltgrass Steak House,
and their utilization is subject to annual limitation. Because of this
limitation, the Company established a valuation allowance to the extent it is
more likely than not that these tax benefits will not be realized.

   The Company has general business tax credit carryovers and minimum tax
credit carryovers of $15.4 million and $5.5 million respectively. The general
business credit carryovers expire in 2018 through 2022 while the minimum tax
credit carryovers have no expiration date. The use of these credits is limited
if the Company is subject to the alternative minimum tax. The Company believes
it is more likely than not that it will generate sufficient income in future
years to utilize these credits.

   The Internal Revenue Service (IRS) is currently examining the Company's
Federal Income Tax Returns, and certain pre-acquisition returns for Rainforest
Cafe, for years 1997 through 2000, as required by virtue of the Company's prior
refund requests related to those periods. The Company does not expect any
adjustments ultimately arising as a result of these examinations to have a
materially adverse impact on its financial statements, and expects to receive
the appropriate refunds, including accrued interest, upon their successful
completion.

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 $42,900,000, $40,600,000, and $23,000,000, during the years ended
December 31, 2002, 2001, and 2000, respectively. Percentage rent included in
rent expense was $10,139,000, $10,300,000, and $1,756,000 for 2002, 2001 and
2000, 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

                                      35

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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 2002, the Company entered into a $6.9 million equipment operating lease
agreement. The lease expires in 2012. 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.

   The aggregate amounts of minimum operating lease commitments maturing in
each of the five years and thereafter subsequent to December 31, 2002, are as
follows:

<TABLE>
                 <S>                               <C>
                 2003............................. $ 40,638,000
                 2004.............................   41,057,000
                 2005.............................   40,145,000
                 2006.............................   36,849,000
                 2007.............................   34,355,000
                 Thereafter.......................  251,737,000
                                                   ------------
                        Total minimum rentals..... $444,781,000
                                                   ============
</TABLE>

Building Commitments

   As of December 31, 2002, the Company had future development, land purchases
and construction commitments of approximately $20.6 million, including
completion of construction on certain new restaurants including the Company's
Downtown Aquarium project in Houston, Texas and a Rainforest Cafe in Galveston,
Texas. In 2001, the Company 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 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. The Company is in the process of
renovating the existing building into a 200-room hotel. Renovation and
construction costs are expected to be approximately $25 million, which will be
expended over several 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 and the Company believes that
the guaranty is invalid.

                                      36

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Litigation and Claims

   Former shareholders, previously holding approximately 4,406,655 shares of
Rainforest Cafe, Inc. dissented to the merger between us and Rainforest Cafe.
Thereupon, Rainforest Cafe sent each dissenting shareholder a check in the
amount of $3.25 per share (Rainforest Cafe's estimate of fair value per share).
Subsequently, most of the dissenting shareholders have made a demand for
supplemental payment based on their ascertation that the fair value per share
of common stock in the former Rainforest Cafe was more. We believe that our
estimate of fair value is correct, and that the dissenting shareholders'
estimate of fair value is significantly inflated. The appraisal trial has
concluded and, in March 2003, the judge has ruled in our favor.

   In January 2002, Rainforest Cafe, Inc., our wholly-owned subsidiary, was
sued by EklecCo, L.L.C., in the Supreme Court of the State of New York in
Onondaga County. EklecCo is seeking damages, and costs as a result of
Rainforest Cafe's alleged breach of a restaurant lease entered into in 1996 for
a Rainforest Cafe unit formerly located in the Palisades Mall. Rainforest Cafe
believes that it has no liability for damages beyond the personal property
located in the premises at the time it vacated the premises. Rainforest Cafe is
defending this case vigorously. Because the case is in its early stages, the
financial impact to us, if any, cannot be predicted.

   On July 31, 2002, and subsequently amended, a purported collective action
lawsuit against us entitled Meaghan Bollenberg, et. al. v. Landry's
Restaurants, Inc. was filed in the United States District Court for the
Northern District of Illinois. The lawsuit was filed by six plaintiffs who were
servers on behalf of themselves and others similarly situated. The lawsuit
alleges that we violated certain minimum wage laws under the federal Fair Labor
Standards Act and seeks damages and costs. We are vigorously defending this
litigation. Because the case is in its early stages, the financial impact to
us, if any, cannot be predicted.

  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 April 2002, the Company completed a public offering of 5,297,500 shares
of the Company's common stock. Net proceeds of the offering to the Company were
approximately $132.6 million and were used to repay outstanding borrowings.

   In October 2002, the Company's board of directors authorized a $50.0 million
open market stock buy back program.

   In connection with the Company's stock buy back programs the Company
repurchased into treasury approximately 305,000, 3,500 and 3.3 million shares
of common stock for approximately $6.7 million, $0.1 million and $25.7 million,
in 2002, 2001, and 2000, 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.

                                      37

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   A reconciliation of the amounts used to compute net income per common
share--diluted is as follows:

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                                 -----------------------------------
                                                    2002        2001        2000
                                                 ----------- ----------- -----------
<S>                                              <C>         <C>         <C>
Net Income...................................... $41,521,616 $26,919,569 $14,650,118
                                                 ----------- ----------- -----------
Weighted average common shares outstanding......  25,900,000  21,750,000  23,400,000
Dilutive common stock equivalents--stock options   1,000,000     785,000     200,000
                                                 ----------- ----------- -----------
Weighted average common and common equivalent
  shares outstanding--diluted...................  26,900,000  22,535,000  23,600,000
                                                 =========== =========== ===========
Net income per share--diluted................... $      1.54 $      1.19 $      0.62
                                                 =========== =========== ===========
</TABLE>
   Options to purchase approximately 200,000 shares in 2001 and 1,300,000
shares in 2000 have been excluded from the calculation of diluted earnings per
share for 2001 and 2000, as they were anti-dilutive.

   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 table below illustrates the effect on net income and earnings per share
if compensation costs for the Company had been determined using the alternative
accounting method based on the fair value prescribed by SFAS No. 123.

<TABLE>
<CAPTION>
                                                            2002         2001         2000
-                                                       -----------  -----------  -----------
<S>                                                     <C>          <C>          <C>
Net income, as reported................................ $41,500,000  $26,900,000  $14,700,000
Less: stock based compensation expense using fair value
  method, net of tax...................................  (1,800,000)  (1,500,000)  (2,000,000)
Pro forma net income................................... $39,700,000  $25,400,000  $12,700,000
Earnings per share
   Basic, as reported.................................. $      1.60  $      1.24  $      0.63
   Basic, pro forma.................................... $      1.53  $      1.17  $      0.54
   Diluted, as reported................................ $      1.54  $      1.19  $      0.62
   Diluted, pro forma.................................. $      1.48  $      1.13  $      0.54
</TABLE>

   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; expected lives of 6, 6 and 4 years for 2002, 2001 and 2000,
respectively; expected stock price volatility of approximately 40% and an
interest rate of approximately 6% in 2000 and 2001, and 2.9% in 2002. The
weighted average fair value per share of options granted during 2002, 2001 and
2000 was $7.83, $5.82 and $3.08, respectively.

                                      38

<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, 2002, options for 2,694,470 shares were outstanding
(1,726,368 of which were exercisable) at prices ranging from $6.00 to $22.24
per share. As of December 31, 2002 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>
                                         2002                2001                2000
                                  ------------------- ------------------- -------------------
                                             Average             Average             Average
                                             Exercise            Exercise            Exercise
                                    Shares    Price     Shares    Price     Shares    Price
                                  ---------  -------- ---------  -------- ---------  --------
<S>                               <C>        <C>      <C>        <C>      <C>        <C>
Options outstanding, beginning of
  year........................... 3,040,926   $ 9.93  3,169,803   $ 9.92  2,810,575   $ 9.97
Granted..........................   464,135   $17.71    623,500   $ 9.83    913,500   $11.44
Exercised........................  (782,514)  $ 9.12   (501,523)  $ 7.05         --       --
Terminated.......................   (28,077)  $13.55   (250,854)  $10.67   (554,272)  $12.73
                                  ---------           ---------           ---------
Options outstanding, end of year. 2,694,470   $11.57  3,040,926   $ 9.93  3,169,803   $ 9.92
                                  =========           =========           =========
Options exercisable, end of year. 1,726,368   $10.33  1,831,694   $10.99  1,827,959   $12.07
                                  =========           =========           =========
</TABLE>

   In the second quarter of 2000, the Company expensed $2,000,000 in costs
associated with a proposed initial acquisition of Rainforest Cafe that was
terminated.

9. 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
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 2002, 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 a value.

                                      39

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   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.

   As permitted by the employment contract between the Company and the Chief
Executive Officer, a charitable contribution was made by the Company to a
charitable Foundation that he served as Trustee in 2002 in the amount of
$197,720.

   The Company on a routine basis holds or hosts promotional events, training
seminars and conferences for its personnel. In connection therewith, the
Company incurred in 2002 expenses in the amount of $229,746 at resort hotel
properties owned by the Company's Chief Executive Officer and to which the
Company provides consulting services. The amount that the Company paid is below
the amount that would have been paid by an unaffiliated third party.

   The Company and Fertitta Hospitality jointly sponsored events and
promotional activities in 2002 which results in shared costs and use of Company
personnel or Fertitta Hospitality employees and assets.

   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.

                                      40

<PAGE>

                          LANDRY'S RESTAURANTS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


10. 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,
                                                            2002      2002       2002          2002
                                                          --------- -------- ------------- ------------
<S>                                                       <C>       <C>      <C>           <C>
Quarter Ended:
   Revenues.............................................. $192,170  $231,938   $241,072      $229,615
   Operating income...................................... $ 10,888  $ 21,115   $ 23,354      $  8,930
   Net income............................................ $  6,183  $ 15,045   $ 15,717      $  4,577
   Net income per share (basic).......................... $   0.28  $   0.58   $   0.57      $   0.17
   Net income per share (diluted)........................ $   0.27  $   0.56   $   0.55      $   0.16

                                                          March 31, June 30, September 30, December 31,
                                                            2001      2001       2001          2001
                                                          --------- -------- ------------- ------------
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>

                                      41

<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 March, 2003.

                                                  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>
            Name                               Title                       Date
            ----                               -----                       ----
<S>                            <C>                                    <C>

     TILMAN J. FERTITTA        Chairman, President, Chief             March 28, 2003
-----------------------------    Executive Officer and
     Tilman J. Fertitta          Director
                                 (Principal Executive
                                 Officer)

        PAUL S. WEST           Executive Vice President,              March 28, 2003
-----------------------------    Chief Financial Officer and Director
        Paul S. West             (Principal Executive
                                 Officer)

    STEVEN L. SCHEINTHAL       Executive Vice President,              March 28, 2003
-----------------------------    Secretary, General Counsel
    Steven L. Scheinthal         and Director

     MICHAEL S. CHADWICK       Director                               March 28, 2003
-----------------------------
     Michael S. Chadwick

      JAMES E. MASUCCI         Director                               March 28, 2003
-----------------------------
      James E. Masucci

       JOE MAX TAYLOR          Director                               March 28, 2003
-----------------------------
       Joe Max Taylor
</TABLE>


                                      42

<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"), the 2001 Form 10-K ("L") and the Form 10-Q for the quarterly
period ended September 30, 2002 ("M"). Such exhibits are denoted with the
letter. Exhibits denoted by * are filed herewith.

<TABLE>
<CAPTION>
    Exhibit No.                                                Exhibit
<S>           <C>

        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") -A-
       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  Fifth Amendment to the First Amended and Restated Credit Agreement dated June 28, 2000.
       10.16  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-
       10.17  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. -L-
       10.18  Asset Purchase Agreement by and among Chart House, Inc., Chart House Enterprises, Inc., LCH Acquisitions, Inc. and
              Landry's Restaurants, Inc. -M-
       10.19  Amendment No. 3 dated July 30, 2002 to Credit Agreement among Landry's Restaurants, Inc. and Bank of America, N.A. as
              administrative agent for Banks. -M-
       10.20  Stock Purchase Agreement dated September 10, 2002 among Landry's Restaurants, Inc., LSRI Holdings, Inc. and Well
              Seasoned, Inc., MetroNational Corporation and Kimberly Restaurants, Ltd. -M-
       10.21  Asset Purchase and Sale Agreement dated September 10, 2002 among Kimberly Restaurants, Ltd., MNC Restaurant
              Properties, L.P., Well Seasoned, Inc. and MetroNational Corporation and LSRI Holdings, Inc. -M-
      *21     Subsidiaries of Landry's Restaurants, Inc.
      *23.1   Consent of Ernst & Young LLP
      *99.1   Certification
      *99.2   Certification
</TABLE>