Exhibit 1
Report of Independent Auditors
Plan Administrator
Luby's Savings and Investment Plan
San Antonio, Texas
We have audited the accompanying statements of net assets available for benefits
of the Luby's Savings and Investment Plan as of December 31, 2000 and 1999, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2000. These financial statements are the responsibility
of the Plan'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 net assets available for benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
ERNST & YOUNG LLP
San Antonio, Texas
May 18, 2001
Luby's Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31,
2000 1999
____ ____
Assets
Cash $ 43 $ -
Investments, at fair value 8,272,702 7,363,539
Receivables:
Participant contributions 12,357 142,741
__________ __________
Net assets available for benefits $8,285,102 $7,506,280
__________ __________
See accompanying notes.
Luby's Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2000
Additions to net assets attributed to:
Investment income:
Net depreciation in fair value of investments $ (670,164)
Interest and dividends 259,041
__________
(411,123)
Contributions:
Participants 2,127,005
__________
Total additions 1,715,882
Deductions from net assets attributed to:
Benefits to participants 933,310
Administrative expenses 3,750
__________
Total deductions 937,060
__________
Net increase 778,822
Net assets available for benefits at beginning of year 7,506,280
__________
Net assets available for benefits at end of year $8,285,102
__________
See accompanying notes.
Luby's Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
1. Significant Accounting Policies
The accounting records of the Luby's Savings and Investment Plan (the Plan) are
maintained on the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States.
The Plan's investments are stated at fair value based on quoted market prices on
the valuation date. Changes in fair market value and gains and losses on the
sale of investment securities are reflected in the statement of changes in net
assets available for benefits as net appreciation (depreciation) in fair value
of investments.
Purchases and sales of securities are recorded on a settlement-date basis.
Interest income is recorded on an accrual basis. Dividends are recorded on the
ex-dividend date.
Certain administrative expenses of the Plan are paid by Luby's, Inc. (the
Company).
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
2. Description of the Plan
The following is a general description of the Plan. Participants should refer to
the Plan agreement for a more complete description of the Plan's provisions.
General
The Plan, which was effective on March 1, 1997, is a defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code (IRC). Employees of
the Company and Luby's Restaurants Limited Partnership who complete one year of
service, which is defined as 1,000 hours, and have attained age 21 are eligible
to participate in the Plan on the next January 1, April 1, July 1, or October 1.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Contributions and Investment Options
Participants may contribute an amount not less than 1% and not exceeding 15% of
their compensation, limited by 401(k) regulations. Participants direct the
investment of their contributions into various investment options offered by the
Plan. The Plan currently offers five collective funds, four mutual funds, and
one common stock fund.
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of Plan earnings and charged with an allocation of any applicable
participant expenses. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
Vesting
Participants are immediately vested in their voluntary contributions plus actual
earnings thereon.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their account balance, reduced by the highest
amount of any loan outstanding within the previous twelve months. Loan terms
range up to 5 years for general purpose loans or up to 30 years for the purchase
of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with prevailing
rates as determined quarterly by the Plan administrator. Interest rates on
outstanding loans range from 8.75 to 10.5 percent. Principal and interest are
paid ratably through payroll deductions.
Payment of Benefits
Upon retirement, or in the event of death or disability, a participant will
receive a lump-sum payment of his (her) account in the Plan and all amounts
which have been allocated to his (her) Plan account. In the event of termination
of employment with the employer for any other reason, the participant is
entitled to the vested portion of his (her) account in the Plan and all vested
amounts which have been allocated to his (her) Plan account.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan subject to the provisions of ERISA.
3. Investments
All investments are held by the Plan's trustee, American Express Trust Company.
The following presents individual investments that represent five percent or
more of the Plan's net assets:
December 31,
2000 1999
____ ____
AET Income Fund II $1,294,116 $1,115,455
AET Medium-Term Horizon Fund 1,129,384 869,991
AET Long-Term Horizon Fund 1,409,628 1,213,301
AET Equity Index Fund II 1,312,837 1,484,014
Baron Asset Fund 1,209,224 1,187,735
Janus Overseas Fund 730,498 685,524
Luby's, Inc. Pooled Stock Fund 488,538 410,413
During 2000, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$670,164 as follows:
Collective funds $ (44,494)
Mutual funds (410,253)
Common stock fund (215,417)
_________
$(670,164)
_________
4. Benefits Payable to Terminated Participants
At December 31, 2000, there were two withdrawing participants in the Plan
entitled to aggregate vested benefits totaling $21,778 in cash distributions
for benefit claims that have been processed and approved for payment prior
to December 31 but not yet paid as of that date.
5. Reconciliation of Financial Statements to Form 5500
The Form 5500 is prepared on the modified cash basis of accounting. The
following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
2000 1999
____ ____
Net assets available for benefits
per the financial statements $8,285,102 $7,506,280
Participant contributions receivable
at December 31 (12,357) (142,741)
__________ __________
Net assets available for benefits
per the Form 5500 $8,272,745 $7,363,539
__________ __________
The following is a reconciliation of contributions received from participants
per the financial statements to the Form 5500 for the year ended December 31,
2000:
Net increase per the financial statements $778,822
Plus:
Amounts receivable from participants at
December 31, 1999 142,741
Less:
Amounts receivable from participants at
December 31, 2000 (12,357)
________
Net increase per the Form 5500 $909,206
________
6. Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated February 13, 1998, stating that the Plan is qualified under Section 401(a)
of the IRC and, therefore, the related trust is exempt from taxation. Subsequent
to the issuance of the determination letter, the Plan was amended. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan administrator believes the Plan is being
operated in compliance with the applicable requirements of the IRC and,
therefore, believes the Plan, as amended, is qualified and the related trust is
tax-exempt.
SUPPLEMENTAL SCHEDULE
Luby's Savings and Investment Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
EIN: 74-1335253 Plan No.: 003
December 31, 2000
Description of Investment,
Identity of Issue, Including Maturity Date,
Borrower, Lessor, Rate of Interest, Collateral, Current
or Similar Party Par or Maturity Date Value
____________________________________________________________________________
*AET Income Fund II Collective fund $1,294,116
*AET Short-Term Horizon Fund Collective fund 117,517
*AET Medium-Term Horizon Fund Collective fund 1,129,384
*AET Long-Term Horizon Fund Collective fund 1,409,628
*AET Equity Index Fund II Collective fund 1,312,837
*AXP Selective Fund Mutual fund 13,098
*AXP New Dimensions Fund Mutual fund 175,848
Baron Asset Fund Mutual fund 1,209,224
Janus Overseas Fund Mutual fund 730,498
*Luby's, Inc. Pooled Stock Fund Common stock 81,423 shares 488,538
*AET Money Market III Cash and Cash Equivalents 7,062
__________
*Participant loans Interest accrued at
prime rate plus 1%,
varying maturity dates,
8.75% - 10.5% charged
during 2000 384,952
__________
$8,272,702
__________
*Denotes party-in-interest