Anyone have any insight regarding this?"More troubling than an unusual loss is an earnings restatement." --Hewitt Heiserman Jr.HOUSTON, Feb. 11 /PRNewswire-FirstCall/ -- Landry's Restaurants, Inc., one of the nation's largest casual dining and entertainment companies, announced today that it is reviewing its accounting treatment for leases. Recently, several other restaurant and retail companies have reported they intend to restate previously issued financial statements due to a revised interpretation of generally accepted accounting principles related to leases, associated leasehold improvements and rent. Based on the reports filed by other restaurant companies, the restatements primarily result from changes in accounting for lease renewal options such that depreciation and/or rent expense increased compared to the previously reported amounts. Such changes were apparently due to the treatment of renewal options in determining depreciation expense and straight line rent expense. The Company has made a preliminary determination that its historical accounting treatment will require modification, but has not yet made a determination as to whether the corrections will be made as a cumulative adjustment in 2004 or as a restatement of one or more previous years. The Company believes such corrections will result in accelerating recognition of rent expense under certain leases that include escalating rent by revising the computation of straight line rent expense to include certain option periods, where failure to exercise such options would result in an economic penalty. Any changes will not affect the Company's previously reported or future cash flows, the timing of payments under the related leases, or compliance with any debt covenants. The Company expects to complete its review of this matter prior to releasing its fourth quarter and full year results in February.
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