Fair Value Measurements

12 Months Ended

Jun. 04, 2013

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

15. 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	June 4, 2013			June 5, 2012
Deferred compensation plan: other investments – Assets	1	$	8,721		$	7,974
Deferred compensation plan: other investments – Liabilities	1		(8,721	)		(7,974	)
Deferred compensation plan: RTI common stock – Equity	1		1,094			1,008
Deferred compensation plan: RTI common stock – Equity	1		(1,094	)		(1,008	)
Total		$	–	$	–	–

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 Consolidated Financial Statements.  The other 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 following table presents the fair values for those assets and liabilities measured on a non-recurring basis and remaining on our Consolidated Balance Sheets as of June 4, 2013 and June 5, 2012 (in thousands):

	Fair Value Measurements
	Level	June 4, 2013		June 5, 2012
Long-lived assets held for sale *	2	$	24,006	$	26,495
Long-lived assets held for use	2		5,802		385
Total		$	29,808	$	26,880

* Included in the carrying value of long-lived assets held for sale as of June 4, 2013 and June 5, 2012 are $14.8 million and $21.8 million, respectively, of assets included in Construction in progress and other in the 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 fiscal years ended June 4, 2013, June 5, 2012, and May 31, 2011 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 ($11.3 million) and Goodwill and trademark impairments ($5.0 million), and the losses associated with discontinued operations are included in Loss from discontinued operations in our Consolidated Statements of Operations and Comprehensive (Loss)/Income (in thousands):

	2013	2012	2011
Included within continuing operations
Long-lived assets held for sale	$      3,556	$         891	$     1,600
Long-lived assets held for use	12,804	11,349	2,477
	$    16,360	$    12,240	$    4,077
Included within discontinued operations	$    18,842	$      1,393	$   2,021

Long-lived assets held for sale are valued using Level 2 inputs, primarily from information obtained through broker listings and 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.  Included within discontinued operations in the table above are charges related to restaurants that were impaired as a result of the closing of 13 Marlin & Ray's restaurants, two Truffles restaurants, and one Wok Hay restaurant during  fiscal 2013.

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 June 4, 2013 and June 5, 2012 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 their carrying values 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, that are subject to fair value disclosures are as follows (in thousands):

	June 4, 2013		June 5, 2012
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Long-term debt and capital leases	$  299,002	$  310,441	$  326,663	$  312,225
Letters of credit	–	270	–	222

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