Note O - Fair Value Measurements

9 Months Ended

Mar. 04, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE O – FAIR VALUE MEASUREMENTS

The following table presents the fair values of our financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Level		March 4, 2014			June 4, 2013
Deferred compensation plan: other investments – Assets		1	$	9,006		$	8,721
Deferred compensation plan: other investments – Liabilities		1		(9,006	)		(8,721	)
Deferred compensation plan: RTI common stock – Equity		1		500			1,094
Deferred compensation plan: RTI common stock – Equity		1		(500	)		(1,094	)
Total			–			–

During the 39 weeks ended March 4, 2014 there were no transfers among levels within the fair value hierarchy.

The Ruby Tuesday, Inc. 2005 Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Ruby Tuesday, Inc. Restated Deferred Compensation Plan (the “Predecessor Plan”) are unfunded, non-qualified deferred compensation plans for eligible employees. Assets earmarked to pay benefits under the Deferred Compensation Plan and Predecessor Plan are held by a rabbi trust. We report the accounts of the rabbi trust in our Condensed Consolidated Financial Statements. The investments held by these plans are reported at fair value based on third-party broker statements. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, is recorded in Selling, general and administrative expense in the Condensed Consolidated Financial Statements.

The following table presents the fair values for those assets and liabilities measured on a non-recurring basis and remaining on our Condensed Consolidated Balance Sheets as of March 4, 2014 and June 4, 2013 (in thousands):

	Fair Value Measurements
	Level		March 4, 2014		June 4, 2013
Long-lived assets held for sale *		2	$	23,299	$	24,006
Long-lived assets held for use		2		7,992		5,802
Total			$	31,291	$	29,808

* Included in the carrying value of long-lived assets held for sale as of March 4, 2014 and June 4, 2013 are $16.7 million and $14.8 million, respectively, of assets included in Construction in progress in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months.

The following table presents the losses recognized during the 13 and 39 weeks ended March 4, 2014 and March 5, 2013 resulting from fair value measurements of assets and liabilities measured on a non-recurring basis. The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Loss from discontinued operations in our Condensed Consolidated Statements of Operations and Comprehensive (Loss)/Income (in thousands):

	Thirteen weeks ended				Thirty-nine weeks ended
	March 4, 2014		March 5, 2013		March 4, 2014		March 5, 2013
Included within continuing operations
Long-lived assets held for sale	$	142	$	543	$	726	$	1,054
Long-lived assets held for use		3,621	–			20,285		2,149
	$	3,763	$	543	$	21,011	$	3,203
Included within discontinued operations	$	25	$	1,669	$	178	$	17,971

Long-lived assets held for sale are valued using Level 2 inputs, primarily representing information obtained through broker listings and sales agreements. Costs to market and/or sell the assets are factored into the estimates of fair value for those assets included in Assets held for sale on our Condensed Consolidated Balance Sheets.

We review our long-lived assets (primarily property, equipment, and, as appropriate, reacquired franchise rights and favorable leases) related to each restaurant to be held and used in the business, whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that we have impaired. From time to time, this will also include closed restaurants or surplus sites that do not meet the held for sale criteria that we have offered for sale at a price less than carrying value.

The Level 2 fair values of our long-lived assets held for use are based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets.

Our financial instruments at March 4, 2014 and June 4, 2013 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit. The fair values of cash and cash equivalents and accounts receivable and payable approximated carrying value because of the short-term nature of these instruments. The carrying amounts and fair values of our other financial instruments not measured on a recurring basis using fair value, however subject to fair value disclosures, are as follows (in thousands):

	March 4, 2014				June 4, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt and capital leases	$	266,873	$	248,214	$	299,002	$	310,441
Letters of credit	–			405	–			270

We estimated the fair value of debt and letters of credit using market quotes and present value calculations based on market rates.