13.

Supplemental Condensed Consolidating Financial Statements

As discussed in Note

to the 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

(f) of Regulation S-

promulgated by the Securities and Exchange Commission, 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

June 6, 2017

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	41,584		$	130	$	–		$	41,714
Restricted cash		6,445			–		–			6,445
Accounts and other receivables		1,913			5,402		–			7,315
Inventories		12,447			4,731		–			17,178
Income tax receivable		175,535			–		(172,474	)		3,061
Other current assets		15,969			7,355		–			23,324
Total current assets		253,893			17,618		(172,474	)		99,037

Property and equipment, net		446,211			136,886		–			583,097
Investment in subsidiaries		51,214			–		(51,214	)		–
Due from/(to) subsidiaries		94,281			213,066		(307,347	)		–
Other assets		37,454			4,054		–			41,508
Total assets	$	883,053		$	371,624	$	(531,035	)	$	723,642

Liabilities & Shareholders ’ Equity
Current liabilities:
Accounts payable	$	14,333		$	3,237	$	–		$	17,570
Accrued and other current liabilities		47,796			33,340		–			81,136

Current maturities of long-term debt, including capital leases		(1,157	)		1,525		–			368
Income tax payable		–			172,474		(172,474	)		–
Total current liabilities		60,972			210,576		(172,474	)		99,074

Long-term debt and capital leases, less current maturities		210,243			3,098		–			213,341
Due to/(from) subsidiaries		213,066			94,281		(307,347	)		–
Other deferred liabilities		91,406			12,455		–			103,861
Total liabilities		575,687			320,410		(479,821	)		416,276

Shareholders ’ equity:
Common stock		607			–		–			607
Capital in excess of par value		79,531			–		–			79,531
Retained earnings		235,210			51,214		(51,214	)		235,210
Accumulated other comprehensive loss		(7,982	)		–		–			(7,982	)
Total shareholders ’ equity		307,366			51,214		(51,214	)		307,366

Total liabilities & shareholders ’ equity	$	883,053		$	371,624	$	(531,035	)	$	723,642

Condensed Consolidating Balance Sheet

As of

May 31, 2016

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	66,831		$	133	$	–		$	66,964
Restricted cash		377			–		–			377
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		35,674			29,957		–			65,631
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)/Income

For the Fiscal Year Ended

June 6, 2017

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	694,398		$	254,005		$	–		$	948,403
Franchise revenue		10			3,558			–			3,568
Total revenue		694,408			257,563			–			951,971

Operating costs and expenses:
Cost of goods sold		196,515			72,107			–			268,622
Payroll and related costs		242,041			96,877			–			338,918
Other restaurant operating costs		146,391			52,305			–			198,696
Depreciation and amortization		30,673			11,106			–			41,779
General and administrative expenses		37,929			29,080			–			67,009
Marketing expenses, net		40,264			13,876			–			54,140
Intercompany general and administrative allocations		38,558			(38,558	)		–			–
Closures and impairments, net		47,191			22,617			–			69,808
Equity in earnings of subsidiaries		(628	)		–			628			–
Interest expense, net		19,973			882			–			20,855
Intercompany interest expense/(income)		12,050			(12,050	)		–			–
Total operating costs and expenses		810,957			248,242			628			1,059,827

(Loss)/income before income taxes		(116,549	)		9,321			(628	)		(107,856	)
(Benefit)/provision for income taxes		(10,409	)		8,693			–			(1,716	)

Net (loss)/income	$	(106,140	)	$	628		$	(628	)	$	(106,140	)

Other comprehensive income:
Pension liability reclassification		2,127			–			–			2,127
Total comprehensive (loss)/income	$	(104,013	)	$	628		$	(628	)	$	(104,013	)

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Fiscal Year Ended

May 31, 2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	785,147		$	299,887		$	–		$	1,085,034
Franchise revenue		245			5,949			–			6,194
Total revenue		785,392			305,836			–			1,091,228

Operating costs and expenses:
Cost of goods sold		216,121			82,408			–			298,529
Payroll and related costs		263,499			111,062			–			374,561
Other restaurant operating costs		167,051			62,467			–			229,518
Depreciation and amortization		36,387			14,971			–			51,358
General and administrative expenses		32,264			25,927			–			58,191
Marketing expenses, net		37,748			13,688			–			51,436
Intercompany general and administrative allocations		42,870			(42,870	)		–			–
Closures and impairments, net		40,683			23,997			–			64,680
Equity in earnings of subsidiaries		(15,212	)		–			15,212			–
Gain on sales of Lime Fresh Mexican Grill assets		(5,937	)		–			–			(5,937	)
Interest expense, net		18,329			3,425			–			21,754
Intercompany interest expense/(income)		12,143			(12,143	)		–			–
Total operating costs and expenses		845,946			282,932			15,212			1,144,090

(Loss)/income before income taxes		(60,554	)		22,904			(15,212	)		(52,862	)
(Benefit)/provision for income taxes		(9,872	)		7,692			–			(2,180	)

Net (loss)/income	$	(50,682	)	$	15,212		$	(15,212	)	$	(50,682	)

Other comprehensive income:
Pension liability reclassification		831			–			–			831
Total comprehensive (loss)/income	$	(49,851	)	$	15,212		$	(15,212	)	$	(49,851	)

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Fiscal Year Ended

June 2, 2015

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	809,171		$	310,971		$	–		$	1,120,142
Franchise revenue		238			6,186			–			6,424
Total revenue		809,409			317,157			–			1,126,566

Operating costs and expenses:
Cost of goods sold		220,537			84,769			–			305,306
Payroll and related costs		270,535			112,726			–			383,261
Other restaurant operating costs		175,819			66,290			–			242,109
Depreciation and amortization		37,466			14,925			–			52,391
General and administrative expenses		39,261			26,646			–			65,907
Marketing expenses, net		36,157			13,263			–			49,420
Intercompany general and administrative allocations		44,768			(44,768	)		–			–
Closures and impairments, net		7,914			2,628			–			10,542
Equity in earnings of subsidiaries		(28,148	)		–			28,148			–
Interest expense, net		18,489			4,246			–			22,735
Intercompany interest expense/(income)		12,009			(12,009	)		–			–
Total operating costs and expenses		834,807			268,716			28,148			1,131,671

(Loss)/income before income taxes		(25,398	)		48,441			(28,148	)		(5,105	)
(Benefit)/provision for income taxes		(22,204	)		20,293			–			(1,911	)
Net (loss)/income	$	(3,194	)	$	28,148		$	(28,148	)	$	(3,194	)

Other comprehensive loss:
Pension liability reclassification, net of tax		(40	)		–			–			(40	)
Total comprehensive (loss)/income	$	(3,234	)	$	28,148		$	(28,148	)	$	(3,234	)

Condensed Consolidating Statement of Cash Flows

For the Fiscal Year Ended

June 6, 2017

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated

Net cash (used in) provided by operating activities	$	(18,767	)	$	48,926		$	(49,093	)	$	(18,934	)

Investing activities:
Purchases of property and equipment		(26,065	)		(7,444	)		–			(33,509	)
Proceeds from disposal of assets		17,051			17,749			–			34,800
Insurance proceeds from property claims		462			202			–			664
Reductions in deferred compensation plan assets		1,890			–			–			1,890
Other, net		2,842			–			–			2,842
Net cash (used in) provided by investing activities		(3,820	)		10,507			–			6,687

Financing activities:
Principal payments on long-term debt		7			(11,093	)		–			(11,086	)
Stock repurchases		(26	)		–			–			(26	)
Payments for debt issuance costs		(1,891	)		–			–			(1,891	)
Dividends paid		–			(48,343	)		48,343			–
Net transactions with related entities		(750	)		–			750			–
Net cash used in financing activities		(2,660	)		(59,436	)		49,093			(13,003	)

Decrease in cash and cash equivalents		(25,247	)		(3	)		–			(25,250	)
Cash and cash equivalents:
Beginning of fiscal year		66,831			133			–			66,964
End of fiscal year	$	41,584		$	130		$	–		$	41,714

Condensed Consolidating Statement of Cash Flows

For the Fiscal Year Ended

May 31, 2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated

Net cash (used in) provided by operating activities	$	15,384		$	71,061		$	(46,665	)	$	39,780

Investing activities:
Purchases of property and equipment		(24,174	)		(10,253	)		–			(34,427	)
Proceeds from disposal of assets		11,701			–			–			11,701
Insurance proceeds from property claims		350			–			–			350
Reductions in deferred compensation plan assets		1,049			–			–			1,049
Other, net		1,572			–			–			1,572
Net cash used in investing activities		(9,502	)		(10,253	)		–			(19,755	)

Financing activities:
Principal payments on long-term debt		(2,379	)		(15,864	)		–			(18,243	)
Stock repurchases		(10,077	)		–			–			(10,077	)
Payments for debt issuance costs		(32	)		–			–			(32	)
Dividends paid		–			(45,108	)		45,108			–
Net transactions with related entities		(1,557	)		–			1,557			–
Net cash (used in) provided by financing activities		(14,045	)		(60,972	)		46,665			(28,352	)

Decrease in cash and cash equivalents		(8,163	)		(164	)		–			(8,327	)
Cash and cash equivalents:
Beginning of fiscal year		74,994			297			–			75,291
End of fiscal year	$	66,831		$	133		$	–		$	66,964

Condensed Consolidating Statement of Cash Flows

For the Fiscal Year Ended

June 2, 2015

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated

Net cash provided by (used in) operating activities	$	63,219		$	77,717		$	(85,882	)	$	55,054

Investing activities:
Purchases of property and equipment		(23,326	)		(7,684	)		–			(31,010	)
Proceeds from disposal of assets		10,213			1,047			–			11,260
Insurance proceeds from property claims		10			135			–			145
Reductions in deferred compensation plan assets		1,318			–			–			1,318
Other, net		790			–			–			790
Net cash used in investing activities		(10,995	)		(6,502	)		–			(17,497	)

Financing activities:
Principal payments on long-term debt		4			(13,642	)		–			(13,638	)
Stock repurchases		(73	)		–			–			(73	)
Payments for debt issuance costs		(293	)		–			–			(293	)
Proceeds from exercise of stock options		556			–			–			556
Excess tax benefits from share-based compensation		39			–			–			39
Dividends paid		–			(57,590	)		57,590			–
Net transactions with related entities		(28,292	)		–			28,292			–
Net cash (used in) provided by financing activities		(28,059	)		(71,232	)		85,882			(13,409	)

Increase/(decrease) in cash and cash equivalents		24,165			(17	)		–			24,148
Cash and cash equivalents:
Beginning of fiscal year		50,829			314			–			51,143
End of fiscal year	$	74,994		$	297		$	–		$	75,291