Note 15 - Fair Value Measurements

12 Months Ended

Jun. 03, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

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 3, 2014			June 4, 2013
Deferred compensation plan: other investments – Assets	1	$	8,930		$	8,721
Deferred compensation plan: other investments – Liabilities	1		(8,930	)		(8,721	)
Deferred compensation plan: RTI common stock – Equity	1		622			1,094
Deferred compensation plan: RTI common stock – Equity	1		(622	)		(1,094	)
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 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 3, 2014 and June 4, 2013 (in thousands):

	Fair Value Measurements
	Level	June 3, 2014		June 4, 2013
Long-lived assets held for sale *	2	$	23,035	$	24,006
Long-lived assets held for use	2		8,882		5,802
Total		$	31,917	$	29,808

* Included in the carrying value of long-lived assets held for sale as of June 3, 2014 and June 4, 2013 are $18.4 million and $14.8 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 3, 2014, June 4, 2013, and June 5, 2012 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 Goodwill 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):

	2014		2013		2012
Included within continuing operations
Long-lived assets held for sale	$	872	$	3,556	$	891
Long-lived assets held for use		24,319		12,804		11,349
	$	25,191	$	16,360	$	12,240
Included within discontinued operations	$	177	$	18,842	$	1,393

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 3, 2014 and June 4, 2013 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 3, 2014				June 4, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt and capital leases	$	258,691	$	263,526	$	299,002	$	310,441
Letters of credit	–			405	–			270

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