Note 12 - Fair Value Measurements
 6 Months Ended
Nov. 29, 2016
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
1
2
. 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
 
 
November 29,
2016
 
 
May 31, 2016
 
Deferred compensation plan
– Assets
 
 
1
 
 
$
6,098
 
 
$
6,660
 
Deferred compensation plan
– Liabilities
 
 
1
 
 
 
(
6,098
)
 
 
(6,660
)
 
There were no transfers among levels within the fair value hierarchy during
the
26
weeks ended
November
29,
2016.
 
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 General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.
 
The investment in RTI common stock and related liability payable in RTI common stock, which are reflected in Shareholders
’ Equity in the Consolidated Balance Sheets, are excluded from the fair value table above as these are considered treasury shares and reported at cost.
 
The following table
presents the fair values on our Condensed Consolidated Balance Sheets as of
November
29,
2016
for those assets and liabilities measured on a non - recurring basis (in thousands):
 
 
 
 
              
   
Fair Value Measurements
    
 
 
Level
 
 
November 29
, 2016
 
 
Long-lived assets held for use
 
 
2
 
 
$
1,806
 
 
Long-lived assets held for sale
 
 
2
 
 
 
1,814
 
 
Total
 
 
 
 
 
$
3,620
 
 
 
The following table presents the losses recognized during the
13
and
26
weeks ended
November
29,
2016
and
December
1,
2015
resulting from fair value measurements of assets and liabilities measured on a non - recurring basis. The amounts presented are included in Closures and impairments, net in our Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):
 
 
Thirteen Weeks Ended
  
Twenty-Six Weeks Ended
  
 
November 29, 2016
  
December 1, 2015
  
November 29, 2016
  
December 1, 2015
  
Long-lived assets held for use
$
10,822
  
$
5,957
  
$
15,016
  
$
8,442
  
Long-lived assets held for sale
  
426
    
258
    
2,812
    
350
  
Lime Fresh trademark
  
–
    
1,999
    
–
    
1,999
  
    Long-lived asset impairments
$
11,248
  
$
8,214
  
$
17,828
  
$
10,791
  
 
Long - lived assets held for sale are valued using Level
2
inputs, primarily from information obtained through broker listings or 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
Condensed 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.
 
The fair values of our long - lived assets held for use are primarily based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets (Level
2).
 
Our
financial instruments at
November
29,
2016
and
May
31,
2016
consisted of cash and cash equivalents, accounts receivable and payable, and long - term debt. 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 long - term debt, which are not measured on a recurring basis using fair value, are as follows (in thousands):
 
 
 
November 29
, 2016
 
 
May 31, 2016
 
 
 
Carrying
Amount
 
 
Fair
Value
 
 
Carrying
Amount
 
 
Fair
Value
 
Long-term debt (Level 2)
 
$
223,042
 
 
$
218,087
 
 
$
223,526
 
 
$
223,212
 
 
We estimated the fair value of debt using market quotes and calculations based on market rates.