Basis of Presentation

Description of Business

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we,” and/or “our”), owns and operates Ruby Tuesday® casual dining restaurants. We also franchise the Ruby Tuesday concept in selected domestic and international

markets.

As discussed further in Note

to the Condensed Consolidated Financial Statements,

during the

weeks ended

February

28,

2017,

we closed

102

Company-owned restaurants,

of which were closed following a comprehensive review of the Company’s property portfolio due to perceived limited upside due to market concentration, challenged trade areas, and other factors. At

February

28,

2017,

we owned and operated

544

Ruby Tuesday restaurants concentrated primarily in the Southeast, Northeast, Mid-Atlantic, and Midwest of the United States, which we consider to be our core markets.

As further discussed in Note

to the Condensed Consolidated Financial Statements, we entered into an agreement during fiscal year

2016

to sell the assets related to

eight

Company-owned Lime Fresh Mexican Grill® (“Lime Fresh”) restaurants. Our last remaining Company-owned Lime Fresh restaurant closed and transferred to the buyer during the

second

quarter of fiscal year

2017.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements

(the “Condensed Consolidated Financial Statements”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not

include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In addition, certain reclassifications were made to prior period amounts to conform to the current period presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates. Operating results for the

and

weeks ended

February

28,

2017

are not necessarily indicative of results that

may

be expected for the

-week year ending

June

2017.

These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in RTI’s Annual Report on Form

-K for the fiscal year ended

May

31,

2016.

Reclassifications

As shown in the table below, we

split our previously reported expenses within Selling, general, and administrative, net into separately reported General and administrative expenses and Marketing expenses, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the prior periods to be comparable with the classification for the

and

weeks ended

February

28,

2017.

Additionally, we reclassified an impairment of the Lime Fresh trademark to Closures and impairments, net, in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the

and

weeks ended

March

2016.

Amounts presented are in thousands.

	Thirteen Weeks Ended
	As presented March 1, 2016		Reclassifications			As adjusted March 1, 2016
Selling, general, and administrative, net	$	27,378	$	(27,378	)	$	–
General and administrative expenses		–		14,148			14,148
Marketing expenses, net		–		13,230			13,230
Closures and impairments, net		6,123		–			6,123

	Thirty-nine Weeks Ended
	As presented March 1, 2016		Reclassifications			As adjusted March 1, 2016
Selling, general, and administrative, net	$	84,622	$	(84,622	)	$	–
General and administrative expenses		–		44,226			44,226
Marketing expense s, net		–		40,396			40,396
Closures and impairments, net		18,908		1,999			20,907
Trademark impairment		1,999		(1,999	)		–

As shown in the table below, we

reclassified an impairment of the Lime Fresh trademark to Loss on impairments, including disposition of assets in the Condensed Consolidated Statement of Cash Flows for the

weeks ended

March

2016.

Amounts presented are in thousands.

	Thirty-nine Weeks Ended
	As presented March 1, 2016		Reclassifications			As adjusted March 1, 2016
Loss on impairments, including disposition of assets	$	15,490	$	1,999		$	17,489
Trademark impairment		1,999		(1,999	)		–