Securities registered pursuant to Section 12(g) of the Act:  None

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 the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]

The aggregate market value of the shares of Common Stock of the registrant held by nonaffiliates of the registrant as of October 20, 2004, was approximately $134,131,624 (based upon the assumption that directors and executive officers are the only affiliates).

The aggregate market value of the shares of Common Stock of the registrant held by nonaffiliates of the registrant as of February 11, 2004, was approximately $78,838,744 (based upon the assumption that directors and executive officers are the only affiliates).

As of October 20, 2004, there were 22,480,004 shares of the registrant's Common Stock outstanding, which does not include 4,933,063 treasury shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following document are incorporated by reference into the designated parts of this Form 10-K:

The Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are available free of charge via hyperlink on its website at www.lubys.com.  The Company makes these reports available as soon as reasonably practicable upon filing with the SEC.  Information on the Company's website is not incorporated into this report.

Luby's, Inc. was restructured into a holding company on February 1, 1997, at which time all of the operating assets were transferred to Luby's Restaurants Limited Partnership, a Texas limited partnership composed of two wholly owned, indirect corporate subsidiaries of the Company.  All restaurant operations are conducted by the partnership.  Unless the context indicates otherwise, the word "Company" as used herein includes the partnership and the consolidated corporate subsidiaries of Luby's, Inc.

As of October 20, 2004, the Company operated 136 restaurants under the name "Luby's."  These establishments are located in close proximity to retail centers, business developments, and residential areas throughout five states (listed under Item 2).  Of the 136 restaurants, 94 are at locations owned by the Company and 42 are on leased premises.  Two of the restaurants primarily serve seafood, one is a steak buffet, three are full-time buffets, 11 are cafeteria-style restaurants with all-you-can-eat options, and 119 are traditional cafeterias.

The Company's historical marketing research has shown that its products appeal to a broad range of value-oriented consumers with particular success among families with children, seniors, shoppers, travelers, and business people looking for a quick, home-style meal at a reasonable price.  During fiscal 2004, the Company spent approximately 1.3% of its sales on traditional marketing venues, including television, newsprint, radio, point-of-purchase, and local-store marketing.  The Company has invested in distinctive store marquees to enhance guest awareness of specific store promotions, with marquees at 99 operating locations as of the end of fiscal 2004.

Luby's restaurants are generally open for lunch and dinner seven days a week.  All of the restaurants sell take-out orders, and many of them have separate food-to-go entrances, which provide guests the option of enjoying complete and flavorful meals at the office or at home.  Take-out orders accounted for 13.7% of sales in fiscal 2004.  Breakfast is served on weekends in 34 of its restaurants, accounting for 1.2% of sales.  Those locations offer a wide array of popular breakfast foods served buffet style.  They also have made-to-order omelette, pancake, and waffle stations.

Each restaurant is operated as a separate unit under the control of a general manager who has responsibility for day-to-day operations, including food production and personnel employment and supervision.   The Company's philosophy is to grant authority to its restaurant managers to direct the daily operations of their stores and, in turn, to compensate them on the basis of their performance, believing this strategy to be a significant factor in restaurant profitability.  Of the total number of general managers employed by the Company, 95 have been employed for more than ten years.  

The Company operates from a centralized purchasing arrangement to obtain the economic benefit of bulk purchasing and lower prices for most of its food products.  The arrangement involves a competitively selected prime vendor for each of its three major purchasing regions.

Foods are prepared fresh daily at the Company's restaurants.  Menus are reviewed periodically by a committee of managers and chefs.  The committee introduces newly developed recipes to ensure offerings are varied and that seasonal food preferences are incorporated.

Quality control teams also help to maintain uniform standards of food preparation.  The teams visit each restaurant as necessary and work with the staff to check adherence to Company recipes, train personnel in new techniques, and implement systems and procedures used universally throughout the Company.

During the fiscal year ended August 25, 2004, the Company closed approximately 10 underperforming units, of which approximately four were adopted into its business plan.  Additionally, three stores closed in fiscal 2003 were also adopted into the plan.  

As of the fiscal year-end, the Company had a workforce of approximately 7,400, consisting of 6,800 nonmanagement restaurant workers; 400 restaurant managers, associate managers, and assistant managers; and 200 clerical, administrative, and executive employees.  Employee relations are considered to be good.  The Company has never had a strike or work stoppage and is not subject to collective bargaining agreements.

The Company is not the sole user of the name Luby's in the cafeteria business.  A cafeteria using the name Luby's is being operated in Texas by an unaffiliated company.  The Company's legal counsel is of the opinion that the Company has the paramount right to use the name Luby's as a service mark in the United States and that the other user could be precluded from expanding its use of the name as a service mark.  

The Company's facilities and food products are subject to state and local health and sanitation laws.  In addition, the Company's operations are subject to federal, state, and local regulations with respect to environmental and safety matters, including regulations concerning air and water pollution and regulations under the Americans with Disabilities Act and the federal Occupational Safety and Health Act.  Over the years, such laws and regulations have resulted in increased costs that have been absorbed by the Company, in turn, improving its compliance.

The Company's restaurants typically contain 8,000 to 10,500 square feet of floor space and can seat 250 to 300 guests simultaneously.

Luby's restaurants are well maintained and in good condition.  In order to maintain appearance and utility, the Company refurbishes and updates its restaurants and equipment and performs scheduled maintenance.  

As of October 20, 2004, the Company's restaurants are regionally located as follows:  two in Arizona, two in Arkansas, two in Louisiana, three in Oklahoma, and 127 in Texas.  

The Company owns the underlying land and buildings in which 94 of its restaurants are located.  Several of these restaurant properties contain excess building space, which is rented to tenants unaffiliated with the Company.

In addition to the owned locations, 42 other restaurants are held under leases, including 17 in regional shopping malls.  Most of the leases provide for a combination of fixed-dollar and percentage rentals.  Many require the Company to pay additional amounts related to property taxes, hazard insurance, and maintenance of common areas.  See Note 9 of the Notes to Consolidated Financial Statements for information concerning the Company's lease rental expenses and lease commitments.  Of the 42 restaurant leases, the current terms of 23 expire before 2010, ten from 2010 to 2014, and nine thereafter.  Thirty-six of the leases can be extended beyond their current terms at the Company's option.

In addition to the properties currently in operation, the Company also has 26 locations on the market for sale.

The Company is moving its corporate offices from San Antonio, Texas, to Houston, Texas, with the relocation expected to be completed by December 3, 2004.  After the relocation, the Company's primary administrative offices will consist of 26,000 square feet of leased space located at 13111 Northwest Freeway in Houston, Texas.  

The Company maintains public liability insurance and property damage insurance on its properties in amounts which management believes to be adequate.

The Company is from time to time subject to pending claims and lawsuits arising in the ordinary course of business.  In the opinion of management, the ultimate resolution of such claims and lawsuits will not have a material adverse effect on the Company's operations or consolidated financial position.  There are no material legal proceedings to which any director, officer, or affiliate of the Company, or any associate of any such director or officer, is a party, or has a material interest, adverse to the Company.

No matter was submitted during the fourth quarter of the fiscal year ended August 25, 2004, to a vote of security holders of the Company.  

Certain information is set forth below concerning the executive officers of the Company, each of whom has been elected to serve until his successor is duly elected and qualified:

There were no sales of unregistered securities or issuer purchases of equity securities in fiscal 2004.  As of October 20, 2004, there were approximately 3,344 record holders of the Company's common stock.

Five-Year Summary Notes continued on next page.

Note:  In fiscal year 2002, the Company moved from 12 calendar months to 13 four-week periods.  The first period of fiscal year 2002 began September 1, 2001, and covered 26 days.  All subsequent periods covered 28 days.  Fiscal year 2002, the Company's conversion year from months to periods, was 362 days in length.  Fiscal 2003 and most years thereafter are 364 days in length.

Note:  The Company's business plan, as approved in fiscal 2003, called for the closure of approximately 50 locations.  In accordance with the plan, the entire fiscal activity of the applicable stores closed through the end of the 2004 fiscal year were reclassified to discontinued operations.  For comparison purposes, in prior fiscal years the entire activity for the same locations closed in fiscal 2003 and fiscal 2004 has also been reclassified to discontinued operations.

Cost of food increased $637,000, or 0.8%, principally due to the increase in sales in fiscal 2004 compared to fiscal 2003.  Upward pressure on beef pricing due to lower production numbers, reduced cattle weights, and an overall higher demand has negatively impacted food cost.  Despite general commodity increases in food pricing, specifically related to the beef and dairy markets, food costs have experienced a slight decline as a percentage of sales, which decreased from 27.2% to 26.9%.  Management's discipline in the utilization of monthly budgeting and protein tracking tools in combination with various promotional offerings have assisted in reducing food costs.  More specifically, food costs have declined in a higher commodity climate due to improved execution at each location in combination with carefully selected entree offerings for promotions which overall have very attractive cost structures.

Payroll and related costs decreased $2.1 million, or 2.4%, and as a percentage of sales decreased from 28.8% to 27.7%.  The decrease is due to continued improvements made in labor deployment and efficiency as a result of various Company initiatives to better manage labor costs, offset by an increase in estimated workers' compensation costs.

Occupancy and other operating expenses increased $3.3 million, or 3.7%, due primarily to increased advertising expense and higher insurance costs.  Occupancy and other operating expenses, as a percentage of sales, increased 0.7% to 30.7% from 30.0%.  The launch of the Company's new marketing campaign, featuring television advertising, led to an increase in marketing costs.  Insurance costs increased as a result of higher cost of insurance coverage and related premiums.  These increases were primarily offset by a reduction in property tax expense due to store closures and related property sales.

Depreciation and amortization expense decreased $588,000, or 3.4%, due to fewer depreciable properties resulting from impairments and property sales.

Due to the current-year accrual of voluntary severance costs in relation to the relocation of the corporate offices from San Antonio, Texas, to Houston, Texas, voluntary severance costs increased by $860,000.  See Note 5 of the Notes to Consolidated Financial Statements for more information.

General and administrative expenses decreased $3.6 million, or 15.3%.  As a percentage of sales, general and administrative expenses decreased 1.3% to 6.4% compared to 7.7%.  This decrease is due to fewer regional management positions due to store closures.  It is also a result of lower professional and consulting services fees associated with a fixed-asset cost-segregation study on tax depreciation and consulting fees related to the debt refinancing, both of which occurred in the prior year.

The provision for asset impairments and restaurant closings decreased by $1.4 million primarily due to a gain realized on the sale of a property which had been previously impaired, coupled with significant impairment charges incurred in the prior year.  This provision included write-downs to currently operating restaurants of $1.2 million offset by a gain of $500,000 related to one property sale.

Interest expense increased $484,000, or 6.4%, due to the accelerated amortization of the subordinated debt discount resulting from the amended subordinated note agreements, coupled with an increase in the effective interest rate on outstanding debt prior to the debt refinancing in June 2004.  Subsequent to the debt refinancing, interest expense has declined principally due to lower amortization of the discount on the restructured subordinated debt, coupled with the effect of a lower senior debt balance.

Other income decreased $4.4 million primarily due to gains on sales of assets recognized in the prior year, which reflected the sale of five previously closed stores.  These gains were partially offset by a loan commitment fee expensed in fiscal 2003.

No provision for income taxes on continuing operations was provided for in fiscal 2004 because the Company's loss carryforward was sufficient to offset income from continuing operations.

The loss from discontinued operations decreased by $23.9 million principally due to numerous impairment charges incurred in the prior year on various locations which were closed as a part of the Company's business plan offset by ongoing periodic property maintenance costs incurred until the properties are sold.

The cost of food increased $1.7 million, or 2.1%, and as a percentage of sales increased from 25.4% to 27.2% in fiscal 2003 compared to fiscal 2002.  Early in the fiscal year, the increase in food cost was related primarily to efforts to implement value offerings for the Company's guests.  Those offerings were a planned part of the Company's strategy aimed at increasing value while maintaining quality.  Also in the beginning of the year, fresh produce pricing was negatively impacted by increased transportation costs due to the higher cost of diesel fuel.  Toward the end of the year, upward pressure on beef pricing due to lower availability, reduced cattle weights, and an overall higher demand negatively impacted food cost.  These increases completely offset reductions due to store closures.  Even so, the increases were partially mitigated in the later part of the year by targeted cost control programs.

Payroll and related costs decreased $13.4 million, or 13.3%, and as a percentage of sales decreased from 31.7% to 28.8%.  The decrease was due primarily to improved labor deployments and efficiencies resulting from various Company initiatives to manage labor costs, lower workers' compensation cost estimates resulting from the Company's in-house training and safety programs, and stores closed prior to the adoption of the business plan.

Occupancy and other operating expenses decreased $3.7 million, or 3.8%.  As a percentage of sales, occupancy and other operating expenses increased 0.2% to 30.0% compared to 29.8%.  Several factors contributed to this fluctuation.  Net repairs and maintenance costs decreased primarily due to increased efficiencies from the Company's in-house repair program as provided by its in-house service center.  Food-to-go packaging costs further declined due to less expensive packaging.  These decreases were partially offset by property/employee insurance, which increased principally due to premium increases for owned properties coupled with pass-through insurance adjustments from landlords of leased properties, as well as premium increases for directors' and officers' liability.  

Depreciation and amortization expense was approximately equal to the prior fiscal year, with a slight decrease of $8,000.

General and administrative expenses increased $2.1 million, or 10.0%.  Several factors contributed to this increase.  As a percentage of sales, general and administrative expenses increased 1.0% to 7.7%, compared to 6.7%.  Professional fees increased principally due to a fixed-asset, cost-segregation study on tax depreciation.  Consulting costs increased principally due to fees paid to outside firms relating to the Company's bank group.  Excluding those items, the Company showed higher year-over-year general and administrative expenses because of the increased investment in support personnel to improve its focus on operational efficiencies and facilities maintenance.  

Interest expense was approximately equal to the prior fiscal year, with only a slight decrease of $66,000.  The payoff of loans on officers' life insurance policies, which were surrendered during the prior year, in addition to amortization of the loss on interest rate swaps and principal reductions on the outstanding bank debt, contributed to this decrease.  These decreases were partially offset by an increase in the effective interest rate on outstanding debt coupled with an increase in the amortization of the discount on the subordinated notes.  Approximately $2.7 million and $2.6 million were reclassified from interest expense to discontinued operations in fiscal 2003 and 2002, respectively.  These reclassifications related to the launch of the Company's business plan whereby the proceeds from certain properties closed and sold are committed to paying down debt.

Other income increased $4.7 million primarily due to gains on the sales of assets, which reflect the sale of nine previously closed stores.  These gains were partially offset by a loan commitment fee expensed in fiscal 2003.

The income tax benefit decreased by $38,000.  No benefit was recorded in fiscal 2003 because the realization of loss carryforward utilization is uncertain.

The loss from discontinued operations increased by $24.9 million principally due to approximately $19.8 million in noncash impairments, with the remainder in carrying costs, allocated bank debt interest, and certain settlement fees incurred on various locations closed as part of the Company's business plan.  The impairment charges included reductions in the fourth quarter of 2003 from gains on the disposal of properties previously held for sale.

Relative to prior closure plans, the Company had a reserve for restaurant closings of approximately $1.7 million and $3.1 million at August 27, 2003, and August 28, 2002, respectively.  Excluding certain lease termination settlements, all material cash outlays required for the store closings originally planned as of August 31, 2001, were made prior to August 27, 2003.  See further discussion in Note 7 of the Notes to Consolidated Financial Statements.

EBITDA
The Company's operating performance is evaluated using several measures.  One of those measures, EBITDA, is derived from the Income (Loss) From Operations GAAP measurement.  EBITDA has historically been used by the Company's lenders to measure compliance with certain financial debt covenants. The Company's senior debt agreements define EBITDA as the consolidated income (loss) from operations set forth in the Company's consolidated statements of operations before depreciation, amortization, other noncash expenses, interest expense, taxes, noncash income and extraordinary gains or losses, and other nonrecurring items of income or expense as approved by the required lenders.

EBITDA increased by $5.9 million from fiscal 2003 to 2004 compared to a decrease of $1.5 million from fiscal 2002 to 2003.  These net changes were due to various applicable reasons noted in the Results of Operations section above.  Prior year amounts have been reclassified to conform to the current year presentation.

As noted previously, prior year amounts have been reclassified to conform to the current year presentation, including the applicable reclassifications of store activity discontinued in accordance with the implementation of the business plan.  While the Company and many in the financial community consider EBITDA to be an important measure of operating performance, it should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles, such as operating income and net income.  In addition, the Company's definition of EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

The Company received a comprehensive income tax refund of $13.4 million in the third quarter of fiscal 2003 that resulted from changes in tax legislation that extended carrybacks of net operating losses.  In addition, the refund was higher than the original fiscal 2002 estimate primarily due to increases in tax depreciation relative to an updated cost-segregation study.

The Company had a working capital deficit of $31.3 million as of August 25, 2004, compared to $112.2 million as of August 27, 2003.  The improvement was primarily attributable to the reclassification of the debt to long-term liabilities subsequent to the debt refinancing.  Excluding the reclassification of the senior debt and subordinated notes explained in the Debt section below, the Company's working capital deficit increased $17.7 million.  That increase in the deficit was primarily attributable to debt paydown and refinancing.  The Company's working capital requirements are expected to be met through cash flows from operations and the available line of credit.

Capital expenditures for the fiscal year ended August 25, 2004, were $8.9 million.  Consistent with prior fiscal years, the Company used most of its capital funds to maintain its investment in existing operating units.  Based on the business plan, the Company again expects to be able to fund all capital expenditures in Fiscal 2005 using cash flows from operations and expects to spend approximately $12 million to $14 million.

From March 2001 until the fourth quarter of fiscal 2004, the Company financed capital acquisitions and working capital needs through careful cash management and the provision of an additional $10 million in subordinate financing from the Company's CEO and the COO.  The additional subordinate financing was funded toward the end of fiscal 2001.  Although no further borrowings were allowed under the senior credit facility, the bank group subsequently authorized an extension of its maturity date, allowing the Company time to seek a replacement to the credit facility that would provide the financing on more favorable terms.  During this period, the Company implemented a new business plan that included the closure of certain underperforming stores and the use of proceeds from resulting property sales to pay down the line of credit.

In the fourth quarter of fiscal 2004, as a result of the refinancing, the Company's new senior debt was in good standing.  Pursuant to the terms of the Subordination and Intercreditor Agreement dated June 7, 2004, if the new senior debt were to be in default at some time in the future, Chris and Harris Pappas have a contractual right (but no obligation) to purchase those loans.

At August 25, 2004, the Company's outstanding senior debt balance was $51.5 million.  From its new revolving line of credit, the Company had an outstanding debt balance of $28.0 million.  This level is down $8.3 million from its original drawn amount of $36.3 million, which occurred in June 2004.  Of the $8.3 million reduction, $2.7 million was derived from a sale leaseback of one property, and $5.6 million was from excess cash.  From its term loan, the Company had an outstanding debt balance of $23.5 million.  This level is down $4.4 million from its original note balance of $27.9 million, which also occurred in June 2004.  The reduction was primarily made with proceeds received on the sale of properties.  Of the $50 million total commitment under the line of credit, $20.8 million was available to the Company at August 25, 2004.

Additionally, as of August 25, 2004, the Company has approximately $2.2 million available under letters of credit through a separate arrangement with another bank.  

Both the new line of credit and the term loan contain financial performance covenants, provisions limiting the use of the Company's cash, and descriptions of certain events of default that could be triggered by changes in the Company's relationship with its CEO and its COO.  As the focus continues toward further strengthening operational and financial performance, management believes that the two new debt instruments will provide the proper level of financing to improve its liquidity.  Additionally, the Company expects to be able to maintain compliance with the specific requirements of each agreement.  

As of August 25, 2004, $195.5 million of the Company's total book value, or 83.3% of its total assets, was pledged as collateral.  These pledged assets included the Company's owned real estate, improvements, equipment, and fixtures.  

Because the stated conversion price represented a discount from the market price ($5.63) of the Company's common stock on the commitment date, a beneficial conversion feature of $8.2 million was created.  This was recorded as a discount to debt with an offset to paid-in capital.  The discount is being amortized over the term of the notes through noncash charges to interest expense amounting to approximately $1.2 million per year.

The Company has agreed to reserve shares held in treasury for issuance to the holders of the subordinated notes upon conversion of the debt.  The Company's treasury shares have also been reserved for two other purposes - the issuance of shares to Messrs. Pappas upon exercise of the options granted to them on March 9, 2001, and for shares issuable under the Company's Nonemployee Director Phantom Stock Plan.  In accordance with an agreement between Messrs. Pappas and the Company dated June 7, 2004, Chris and Harris Pappas have agreed to limit their exercise of stock options to a number that will ensure the "net treasury shares available" are not exceeded.   Pursuant to the terms of that agreement, the Company indicated that it will use reasonable efforts to list on the New York Stock Exchange additional shares which would permit full exercise of those options.  "Net Treasury Shares Available" is defined in the debt agreements as the number of shares of common stock then held by the Company in treasury, minus the number of shares of common stock issuable or issued after June 7, 2004, under the Nonemployee Director Phantom Stock Plan, minus the number of shares of common stock issuable or issued upon conversion of the subordinated notes, calculated assuming the lowest conversion price stated in the subordinated notes.  

In connection with the renegotiation of its senior debt, the Company arranged for the issuance of a letter of credit, entered into on June 7, 2004, for approximately $1.2 million.  That amount is intended as an estimate to cover principal and cumulative accrued interest that was due as of September 30, 2004.  After that date, JPMorgan Chase Bank can use the letter of credit to draw on the current line of credit to pay down any portion of the unpaid officer loans, as well as the accrued interest, for any loans that are in default.  As of the date of this report, JPMorgan Chase Bank has not taken any action to draw upon the letter of credit.

In anticipation of the maturity of its obligation to purchase the loans, the Company worked out settlement agreements with several of the debtors pursuant to which the Company would contribute up to $530,000 under the terms of the settlement agreement.  As of August 25, 2004, the Company has recognized a liability of $530,000 in accrued expenses and other liabilities.  

In addition to the commitments represented in the above tables, the Company enters into a number of cancelable and noncancelable commitments during the year.  Typically, these commitments are for less than a year in duration and are generally focused on food inventory.  The Company does not maintain any long-term or exclusive commitments or arrangements to purchase products from any single supplier.  Substantially all of the Company's product purchase commitments are cancelable up to 30 days prior to the vendor's scheduled shipment date.  

Long-term liabilities reflected in the Company's consolidated financial statements as of August 25, 2004, included deferred income taxes ($1.1 million), deferred gain on the sale of property ($382,000), amounts accrued for benefit payments under the Company's supplemental executive retirement plan ($488,000) and deferred compensation agreements ($551,000), accrued insurance reserves ($3.9 million), and reserve for restaurant closings ($500,000).

The Company is also contractually obligated to the chief executive officer and the chief operating officer pursuant to employment agreements.  See the Related Parties section of "Affiliations and Related Parties" for further information.

Additionally, on July 23, 2002, the Company entered into a Master Sales Agreement with the same Pappas entities.  Through this agreement, the Company contractually separated the design and fabrication of equipment and furnishings from the Affiliate Services Agreement.  The Master Sales Agreement covers the costs incurred for modifications to existing equipment, as well as custom fabrication, including stainless steel stoves, shelving, rolling carts, and chef tables.  These items are custom-designed and built to fit the designated kitchens and are also engineered to give a longer service life than comparably manufactured equipment.

The pricing of equipment, repair, and maintenance is set and evaluated periodically and is considered by management to be primarily at or below market for comparable goods and services.  To assist in periodically monitoring pricing of the transactions associated with the Master Sales Agreement and the Affiliate Services Agreement, the Finance and Audit Committee of the Company's Board of Directors has periodically in the past used independent valuation consultants.

As part of the affiliation with the Pappas entities, the Company leases a facility, the Houston Service Center, in which Luby's has installed a centralized restaurant service center to support field operations.  The building at this location has 22,253 square feet of warehouse space and 5,664 square feet of office space.  It is leased from the Pappas entities by the Company at an approximate monthly rate of $0.24 per square foot.  From this center, Luby's repair and service teams are dispatched to the Company's restaurants when facility or equipment maintenance and servicing are needed.  The facility is also used for repair and storage of new and used equipment.  The amount paid by the Company pursuant to the terms of this lease was approximately $82,000, $79,000, and $78,000 for fiscal 2004, 2003, and 2002, respectively.

The Company previously leased a location from an unrelated third party.  That location is used to house increased equipment inventories due to store closures under the business plan.  The Company considered it more prudent to lease this location rather than to pursue purchasing a storage facility, as its strategy is to focus its capital expenditures on its operating restaurants.  In a separate transaction, the third-party property owner sold the location to the Pappas entities during the fourth quarter of fiscal 2003, with the Pappas entities becoming the Company's landlord for that location effective August 1, 2003.  The storage site complements the Houston Service Center with approximately 27,000 square feet of warehouse space at an approximate monthly rate of $0.21 per square foot.  The amount paid by the Company pursuant to the terms of this lease was approximately $69,000 for fiscal 2004.

In another separate contract, pursuant to the terms of a ground lease dated March 25, 1994, the Company paid rent to PHCG Investments for a Luby's restaurant the Company operated in Dallas, Texas, until that location was closed early in the third quarter of fiscal 2003.  Christopher J. Pappas and Harris J. Pappas are general partners of PHCG Investments.  Preceding the store's closure, the Company entered into a lease termination agreement with a third party unaffiliated with the Pappas entities.  That agreement severed the Company's interest in the PHCG property in exchange for a payment of cash to the Company.  The Company also obtained the right to remove fixtures and equipment from the premises, and it was released from any future obligations under the lease agreement.  The closing of the transaction was completed during the third quarter of fiscal 2003, resulting in a gain of $735,000, and the gross proceeds were used to pay down debt.  The amount paid by the Company pursuant to the terms of this lease before its termination was approximately $42,000 and $85,000 in fiscal 2003 and 2002, respectively.  No costs were incurred under this lease in fiscal 2004.

Late in the third quarter of fiscal 2004, Chris and Harris Pappas became limited partners in a limited partnership which purchased a retail strip center in Houston, Texas.  Messrs. Pappas own a 50% limited partnership interest.  Neither of Messrs. Pappas own any interest in the general partner of the limited partnership.  The general partner of the limited partnership controls the operational decisions of the partnership.  One of the Company's restaurants has rented approximately 7% of the space in that center since July of 1969.  No changes were made to the Company's lease terms as a result of the transfer of ownership of the center to the new partnership.  The amount paid by the Company pursuant to the terms of this lease since the Pappas's inclusion as limited partners was $56,000 in fiscal 2004.  Management is under instruction that no amendments can be made to this lease without the approval of the Finance and Audit Committee.

Affiliated rents paid for the Houston Service Center, the separate storage facility, the Dallas property, and the Houston property leases combined represented 4.8%, 2.8%, and 3.3% of total rents for continuing operations for fiscal 2004, 2003, and 2002, respectively.

The following compares current and prior fiscal year-to-date charges incurred under the Master Sales Agreement, the Affiliate Services Agreement, and affiliated property leases to the Company's total capital expenditures, as well as relative general and administrative expenses and occupancy and other operating expenses included in continuing operations: