Note 13 - Fair Value Measurements

12 Months Ended

May 31, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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. 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		May 31, 2016			June 2, 2015
Deferred compensation plan – Assets		1	$	6,660		$	8,017
Deferred compensation plan – Liabilities		1		(6,660	)		(8,017	)

There were no transfers among levels within the fair value hierarchy during fiscal years

2016 or 2015.

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 ear

marked 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 Consolidated Financial Statements. The investments held by these plans are considered trading securities and are reported at fair value based on third-party broker statements. The realized and unrealized holding gains and losses related to these other investments, as well as the offsetting compensation expense, is recorded in Selling, general, and administrative expense, net in the Consolidated Financial Statements.

The investment in RTI common stock and related liability payable in RTI common stock, which are reflected in Shareholders

’ Equity in the Consolidated Balance Sheets, are excluded from the fair value table above as these are considered treasury shares and reported at cost.

The following table presents the fair values

on our Consolidated Balance Sheets as of May 31, 2016 and June 2, 2015 for those assets and liabilities measured on a non-recurring basis (in thousands):

	Fair Value Measurements
	Level		May 31, 2016		June 2, 2015
Long-lived assets held for sale		2	$	2,123	$	3,708
Long-lived assets held for use		2		56,101		3,283
Long-lived assets held for use		3		553		–
Total			$	58,777	$	6,991

The following table presents the losses recognized during the fiscal years ended

May 31, 2016, June 2, 2015, and June 3, 2014 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 Trademark impairments, and the losses associated with discontinued operations are included in Loss from discontinued operations in our Consolidated Statements of Operations and Comprehensive Loss (in thousands):

	201 6		201 5		201 4
Included within continuing operations
Long-lived assets held for sale	$	447	$	1,830	$	872
Long-lived assets held for use		57,706		7,992		23,464
Lime Fresh trademark		1,999		–		855
	$	60,152	$	9,822	$	25,191
Included within discontinued operations					$	177

Long-lived assets held for sale are valued using Level 2 inputs, primarily

from information obtained through broker listings or sales agreements. Costs to market and/or sell are factored into the estimates of fair value for those properties included in Assets held for sale on our 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 a restaurant may not be recoverable.

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

The fair

values of our long-lived assets held for use are primarily based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets (Level 2) or discounted cash flow estimates using unobservable inputs (Level 3).

Our financial

instruments at May 31, 2016 and June 2, 2015 consisted of cash and cash equivalents, accounts receivable and payable, and long-term debt. The fair values of cash and cash equivalents and accounts receivable and payable approximated their carrying values because of the short-term nature of these instruments. The carrying amounts and fair values of our long-term debt, which are not measured on a recurring basis using fair value, are as follows (in thousands):

	May 31, 2016				June 2, 2015
					(as adjusted)
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (Level 2)	$	223,526	$	223,212	$	240,889	$	255,194

We estimated the fair value of debt using

market quotes and calculations based on market rates.