Note O – Fair Value Measurements

6 Months Ended

Dec. 02, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE O – FAIR VALUE MEASUREMENTS

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

	Level		December 2, 2014			June 3, 2014
Deferred compensation plan: other investments – Assets		1	$	8,732		$	8,930
Deferred compensation plan: other investments – Liabilities		1		(8,732	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity		1		591			622
Deferred compensation plan: RTI common stock – Equity		1		(591	)		(622	)
Total			$	-		$	-

There were no transfers among levels within the fair value hierarchy during the 26 weeks ended December 2, 2014.

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 value of assets measured on a non-recurring basis during the 13 weeks ended December 2, 2014 and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Fair Value Measurements
	Level		December 2, 2014
Long-lived assets held for sale		2	$	1,770
Long-lived assets held for use		2		67
Total			$	1,837

The following table presents the losses recognized during the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 resulting from non-recurring fair value measurements. The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Income from discontinued operations, net of tax in our Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):

	Thirteen weeks ended				Twenty-six weeks ended
	December 2, 2014		December 3, 2013		December 2, 2014		December 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	203	$	315	$	802	$	584
Long-lived assets held for use		1,013		12,003		1,470		16,664
	$	1,216	$	12,318	$	2,272	$	17,248
Included within discontinued operations			$	-			$	153

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 December 2, 2014 and June 3, 2014 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit. The fair value of cash and cash equivalents and accounts receivable and payable approximated carrying value due to the short-term nature of these instruments. The carrying value and fair value of our other financial instruments not measured at fair value on a recurring basis, however subject to fair value disclosures, are as follows (in thousands):

	December 2, 2014				June 3, 2014
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Long-term debt	$	252,236	$	257,278	$	258,490	$	262,985

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