. Supplemental Condensed Consolidating Financial Statements

As discussed in Note

to the

Condensed Consolidated Financial Statements, the Senior Notes are a liability of Ruby Tuesday, Inc. (the “Parent”) and are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions (the “Guarantors”). Each of the Guarantors is wholly-owned by Ruby Tuesday, Inc. None of the few remaining subsidiaries of Ruby Tuesday, Inc., which were primarily created to hold liquor license assets, guarantee the Senior Notes (the “Non-Guarantors”). Our Non-Guarantor subsidiaries are immaterial and are aggregated within the Parent information disclosed below.

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule

10(f)

of Regulation S-X promulgated by the SEC, presents the condensed consolidating financial information separately for the Parent, the Guarantors, and elimination entries necessary to consolidate the Parent and Guarantors. Investments in wholly-owned subsidiaries are accounted for using the equity method for purposes of the consolidated presentation. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheet

As of

February

2017

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	32,495		$	132	$	–		$	32,627
Accounts and other receivables		8,223			5,192		–			13,415
Inventories		13,068			4,949		–			18,017
Income tax receivable		173,370			–		(168 ,632	)		4,738
Other current assets		16,906			11,679		–			28,585
Total current assets		244,062			21,952		(168,632	)		97,382

Property and equipment, net		459,402			142,146		–			601,548
Investment in subsidiaries		70,596			–		(70 ,596	)		–
Due from/(to) subsidiaries		93,299			222,799		(316 ,098	)		–
Other assets		39,617			4,263		–			43,880
Total assets	$	906,976		$	391,160	$	(555 ,326	)	$	742,810

Liabilities & Shareholders ’ Equity
Current liabilities:
Accounts payable	$	18,834		$	4,749	$	–		$	23,583
Accrued and other current liabilities		50,686			18,313		–			68,999
Deferred revenue – gift cards		(502	)		17,974		–			17,472
Current maturities of long-term debt,
including capital leases		(1 ,132	)		1,481		–			349
Income tax payable		–			168,632		(168 ,632	)		–
Total current liabilities		67,886			211,149		(168,632	)		110,403

Long-term debt and capital leases,
less current maturities		209,911			3,622		–			213 ,533
Due to/(from) subsidiaries		222,799			93,299		(316 ,098	)		–
Other deferred liabilities		91,984			12,494		–			104,478
Total liabilities		592,580			320,564		(484 ,730	)		428,414

Shareholders ’ equity:
Common stock		605			–		–			605
Capital in excess of par value		78,937			–		–			78,937
Retained earnings		243,897			70,596		( 70,596	)		243,897
Accumulated other comprehensive loss		(9 ,043	)		–		–			(9,043	)
Total shareholders ’ equity		314,396			70,596		(70,596	)		314,396

Total liabilities & shareholders ’ equity	$	906,976		$	391,160	$	(555 ,326	)	$	742,810

Condensed Consolidating Balance Sheet

As of

May

31,

2016

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	67,208		$	133	$	–		$	67,341
Accounts and other receivables		8,102			4,725		–			12,827
Inventories		15,401			6,194		–			21,595
Income tax receivable		167,065			–		(164,062	)		3,003
Other current assets		11,282			4,868		–			16,150
Total current assets		269,058			15,920		(164,062	)		120,916

Property and equipment, net		501,482			169,768		–			671,250
Investment in subsidiaries		98,929			–		(98,929	)		–
Due from/(to) subsidiaries		76,208			213,816		(290,024	)		–
Other assets		40,626			5,125		–			45,751
Total assets	$	986,303		$	404,629	$	(553,015	)	$	837,917

Liabilities & Shareholders ’ Equity
Current liabilities:
Accounts payable	$	17,405		$	4,736	$	–		$	22,141
Accrued and other current liabilities		36,155			13,122		–			49,277
Deferred revenue – gift cards		(481	)		16,835		–			16,354
Current maturities of long-term debt,
including capital leases		(1,067	)		11,001		–			9,934
Income tax payable		–			164,062		(164,062	)		–
Total current liabilities		52,012			209,756		(164,062	)		97,706

Long-term debt and capital leases,
less current maturities		209,058			4,745		–			213,803
Due to/(from) subsidiaries		213,816			76,208		(290,024	)		–
Other deferred liabilities		103,637			14,991		–			118,628
Total liabilities		578,523			305,700		(454,086	)		430,137

Shareholders ’ equity:
Common stock		601			–		–			601
Capital in excess of par value		75,938			–		–			75,938
Retained earnings		341,350			98,929		(98,929	)		341,350
Accumulated other comprehensive loss		(10,109	)		–		–			(10,109	)
Total shareholders ’ equity		407,780			98,929		(98,929	)		407,780

Total liabilities & shareholders ’ equity	$	986,303		$	404,629	$	(553,015	)	$	837,917

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the

Thirteen Weeks Ended

February

2017

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	165,005		$	59,933		$	–		$	224,938
Franchise revenue		–			794			–			794
Total revenue		165,005			60,727			–			225,732

Operating costs and expenses:
Cost of goods sold		47,164			17,176			–			64,340
Payroll and related costs		57,485			22,595			–			80,080
Other restaurant operating costs		33,356			11,730			–			45,086
Depreciation and amortization		7,509			2,612			–			10,121
G eneral and administrative expenses		7,295			6,581			–			13,876
Intercompany general and administrative allocations		9,167			(9,167	)		–			–
Marketing expenses, net		10,296			3,511			–			13,807
Closures and impairments, net		11,253			2,188			–			13,441
Equity in earnings of subsidiaries		(2,017	)		–			2,017			–
Interest expense, net		4,688			182			–			4,870
Intercompany interest expense/(income)		3,035			(3,035	)		–			–
Total operating costs and expenses		189,231			54,373			2,017			245,621

(Loss)/income before income taxes		(24 ,226	)		6,354			2,017			(19,889	)
(Benefit)/provision for income taxes		(4,421	)		4,337			–			(84	)

Net (loss)/income	$	(19 ,805	)	$	2,017		$	(2,017	)	$	(19,805	)

Other comprehensive income:
Pension liability reclassification		356			–			–			356
Total comprehensive (loss)/income	$	(19 ,449	)	$	2,017		$	(2,017	)	$	(19,449	)

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the Thirty

-Nine

Weeks Ended

February

2017

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	507,414		$	187,103		$	–		$	694,517
Franchise revenue		10			2,581			–			2,591
Total revenue		507,424			189,684			–			697,108

Operating costs and expenses:
Cost of goods sold		145,051			53,621			–			198,672
Payroll and related costs		179,149			71,956			–			251,105
Other restaurant operating costs		108,613			40,456			–			149,069
Depreciation and amortization		23,265			8,573			–			31,838
G eneral and administrative expenses		26,376			21,983			–			48,359
Intercompany general and administrative allocations		28,223			(28,223	)		–			–
Marketing expenses, net		32,119			11,209			–			43,328
Closures and impairments, net		38,025			21,316			–			59,341
Equity in losses of subsidiaries		7,791			–			(7 ,791	)		–
Interest expense, net		13,829			762			–			14,591
Intercompany interest expense/(income)		8,983			(8,983	)		–			–
Total operating costs and expenses		611,424			192,670			(7 ,791	)		796,303

(Loss)/income before income taxes		(104 ,000	)		(2 ,986	)		7,791			(99 ,195	)
(Benefit)/provision for income taxes		(6 ,547	)		4,805			–			(1 ,742	)

Net loss	$	(97 ,453	)	$	(7 ,791	)	$	7,791		$	(97,453	)

Other comprehensive income:
Pension liability reclassification		1,066			–			–			1,066
Total comprehensive loss	$	(96,387	)	$	(7 ,791	)	$	7,791		$	(96,387	)

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the

Thirteen Weeks Ended

March

2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	194,527		$	75,341		$	–		$	269,868
Franchise revenue		90			1,512			–			1,602
Total revenue		194,617			76,853			–			271,470

Operating costs and expenses:
Cost of goods sold		54,209			20,934			–			75,143
Payroll and related costs		65,474			27,883			–			93,357
Other restaurant operating costs		40,008			15,303			–			55,311
Depreciation and amortization		9,008			3,724			–			12,732
General and administrative expenses		7,315			6,833			–			14,148
Intercompany general and administrative allocations		10,726			(10,726	)		–			–
Marketing expenses, net		9,685			3,545			–			13,230
Closures and impairments, net		3,993			2,130			–			6,123
Equity in earnings of subsidiaries		(5,676	)		–			5,676			–
Interest expense, net		4,556			439			–			4,995
Intercompany interest expense/(income)		3,058			(3,058	)		–			–
Total operating costs and expenses		202,356			67,007			5,676			275,039

(Loss)/income before income taxes		(7,739	)		9,846			(5,676	)		(3,569	)
(Benefit)/provision for income taxes		(4,653	)		4,170			–			(483	)
Net (loss)/income	$	(3,086	)	$	5,676		$	(5,676	)	$	(3,086	)

Other comprehensive income:
Pension liability reclassification, net of tax		885			–			–			885
Total comprehensive (loss)/income	$	(2,201	)	$	5,676		$	(5,676	)	$	(2,201	)

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the Thirty-Nine Weeks Ended

March

2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	583,055		$	224,050		$	–		$	807,105
Franchise revenue		220			4,581			–			4,801
Total revenue		583,275			228,631			–			811,906

Operating costs and expenses:
Cost of goods sold		160,212			61,477			–			221,689
Payroll and related costs		197,732			83,244			–			280,976
Other restaurant operating costs		126,234			47,669			–			173,903
Depreciation and amortization		27,305			11,169			–			38,474
General and administrative expenses		23,797			20,429			–			44,226
Intercompany general and administrative allocations		32,188			(32,188	)		–			–
Marketing expenses, net		29,591			10,805			–			40,396
Closures and impairments, net		16,080			4,827			–			20,907
Equity in earnings of subsidiaries		(18,907	)		–			18,907			–
Interest expense, net		13,806			2,294			–			16,100
Intercompany interest expense/(income)		9,049			(9,049	)		–			–
Total operating costs and expenses		617,087			200,677			18,907			836,671

(Loss)/income before income taxes		(33,812	)		27,954			(18,907	)		(24,765	)
(Benefit)/provision for income taxes		(10,733	)		9,047			–			(1,686	)
Net (loss)/income	$	(23,079	)	$	18,907		$	(18,907	)	$	(23,079	)

Other comprehensive income:
Pension liability reclassification, net of tax		1,347			–			–			1,347
Total comprehensive (loss)/income	$	(21,732	)	$	18,907		$	(18,907	)	$	(21,732	)

Condensed Consolidating Statement of Cash Flows

For the Thirty

-Nine

Weeks Ended

February

2017

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated

Net cash (used)/pr ovided by operating activities	$	(38,058	)	$	27,897		$	(11 ,558	)	$	(21,719	)

Investing activities:
Purchases of property and equipment		( 21,631	)		(5 ,321	)		–			(26 ,952	)
Proceeds from disposal of assets		13,471			8,573			–			22,044
Insurance proceeds from property claims		358			–						358
Reductions in Deferred Compensation Plan assets		1,702			–						1,702
Other, net		1,439			–			–			1,439
Net cash (used)/provided by investing activities		(4,661	)		3 ,252			–			(1,409	)

Financing activities:
Principal payments on long-term debt		(4	)		(10,609	)		–			(10,613	)
Stock repurchases		(26	)		–			–			(26	)
Payments for debt issuance costs		(947	)		–			–			(947	)
Intercompany dividend		–			(20 ,541	)		20,541			–
Other i ntercompany transactions		8,983			–			(8,983	)		–
Net cash ( used)/provided by financing activities		8,006			(31 ,150	)		11,558			( 11,586	)

De crease in cash and cash equivalents		(34,713	)		(1	)		–			(34,714	)
Cash and cash equivalents:
Beginning of fiscal year		67,208			133			–			67,341
End of quarter	$	32,495		$	132		$	–		$	32,627

Condensed Consolidating Statement of Cash Flows

For the Thirty

-Nine

Weeks Ended

March

2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated

Net cash (used)/provided by operating activities	$	(8 ,133	)	$	41,932		$	( 15,260	)	$	18,539

Investing activities:
Purchases of property and equipment		( 19,892	)		( 7,454	)		–			( 27,346	)
Proceeds from disposal of assets		6,193			–			–			6,193
Other, net		2,444			–			–			2,444
Net cash used by investing activities		( 11,255	)		(7 ,454	)		–			( 18,709	)

Financing activities:
Principal payments on long-term debt		( 2,390	)		(10,274	)		–			(12,664	)
Stock repurchases		(10,009	)		–			–			(10,009	)
Payments for debt issuance costs		( 30	)		–			–			(30	)
Intercompany dividend		–			(24,309	)		24,309			–
Other intercompany transactions		9,049			–			(9,049	)		–
Net cash (used)/provided by financing activities		(3,380	)		(34 ,583	)		15,260			(22 ,703	)

Decrease in cash and cash equivalents		(22,768	)		(105	)		–			(22 ,873	)
Cash and cash equivalents:
Beginning of fiscal year		75,034			297			–			75,331
End of quarter	$	52,266		$	192		$	–		$	52,458