Condensed Consolidating Schedules

9 Months Ended

Sep. 27, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Consolidating Guarantor Financial Information:

The senior notes issued by CEC Entertainment, Inc. (the “Issuer”) in conjunction with the Merger are our unsecured obligations and are fully and unconditionally, jointly and severally guaranteed by all of our 100% wholly-owned U.S. subsidiaries (the “Guarantors”). Our wholly-owned foreign subsidiaries and our less-than-wholly-owned U.S. subsidiaries are not a party to the guarantees (the “Non-Guarantors”). The following schedules present the condensed consolidating financial statements of the Issuer, Guarantors and Non-Guarantors, as well as consolidated results, for the periods presented:

CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of September 27, 2015
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	53,482		$	327		$	7,088		$	—		$	60,897
Accounts receivable	12,126			2,564			4,783			(4,115		)	15,358
Inventories	9,672			13,286			207			—			23,165
Other current assets	19,626			3,882			1,590			—			25,098
Total current assets	94,906			20,059			13,668			(4,115		)	124,518
Property and equipment, net	600,121			36,052			9,192			—			645,365
Goodwill	432,462			51,414			—			—			483,876
Intangible assets, net	22,570			466,579			—			—			489,149
Intercompany	136,612			16,464			—			(153,076		)	—
Investment in subsidiaries	416,194			—			—			(416,194		)	—
Other noncurrent assets	25,870			6,957			573			—			33,400
Total assets	$	1,728,735		$	597,525		$	23,433		$	(573,385	)	$	1,776,308
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	9,500		$	48		$	—		$	—		$	9,548
Capital lease obligations, current portion	405			—			3			—			408
Accounts payable and accrued expenses	85,597			14,868			3,708			—			104,173
Other current liabilities	3,262			328			—			—			3,590
Total current liabilities	98,764			15,244			3,711			—			117,719
Capital lease obligations, less current portion	15,089			—			68			—			15,157
Bank indebtedness and other long-term debt, less current portion	993,078			32			—			—			993,110
Deferred tax liability	186,136			16,777			368			—			203,281
Intercompany	—			133,975			23,216			(157,191		)	—
Other noncurrent liabilities	212,591			11,121			252			—			223,964
Total liabilities	1,505,658			177,149			27,615			(157,191		)	1,553,231
Stockholders' equity:
Common stock	—			—			—			—			—
Capital in excess of par value	356,329			466,114			3,241			(469,355		)	356,329
Retained earnings (deficit)	(130,440		)	(45,738		)	(4,611		)	50,349			(130,440		)
Accumulated other comprehensive income (loss)	(2,812		)	—			(2,812		)	2,812			(2,812		)
Total stockholders' equity	223,077			420,376			(4,182		)	(416,194		)	223,077
Total liabilities and stockholders' equity	$	1,728,735		$	597,525		$	23,433		$	(573,385	)	$	1,776,308

CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of December 28, 2014
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	97,020		$	6,427		$	7,547		$	—		$	110,994
Accounts receivable	13,209			5,487			3,797			(3,658		)	18,835
Inventories	15,008			3,596			375			—			18,979
Other current assets	19,086			3,711			2,040			—			24,837
Total current assets	144,323			19,221			13,759			(3,658		)	173,645
Property and equipment, net	638,239			33,064			10,669			—			681,972
Goodwill	432,462			50,982			—			—			483,444
Intangible assets, net	24,649			466,751			—			—			491,400
Intercompany	129,429			25,090			32,655			(187,174		)	—
Investment in subsidiaries	428,836			—			—			(428,836		)	—
Other noncurrent assets	27,770			5,875			37			—			33,682
Total assets	$	1,825,708		$	600,983		$	57,120		$	(619,668	)	$	1,864,143
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	9,500		$	45		$	—		$	—		$	9,545
Capital lease obligations, current portion	405			—			3			—			408
Accounts payable and accrued expenses	82,995			21,989			(248		)	(484		)	104,252
Other current liabilities	2,990			—			—			—			2,990
Total current liabilities	95,890			22,034			(245		)	(484		)	117,195
Capital lease obligations, less current portion	15,395			—			81			—			15,476
Bank indebtedness and other long-term debt	998,374			67			—			—			998,441
Deferred tax liability	207,258			14,877			780			—			222,915
Intercompany	6,309			126,497			57,542			(190,348		)	—
Other noncurrent liabilities	209,896			7,472			162			—			217,530
Total liabilities	1,533,122			170,947			58,320			(190,832		)	1,571,557
Stockholders' equity:
Common stock	—			—			—			—			—
Capital in excess of par value	355,587			465,451			3,089			(468,540		)	355,587
Retained earnings (deficit)	(62,088		)	(35,415		)	(3,376		)	38,791			(62,088		)
Accumulated other comprehensive income (loss)	(913		)	—			(913		)	913			(913		)
Total stockholders' equity	292,586			430,036			(1,200		)	(428,836		)	292,586
Total liabilities and stockholders' equity	$	1,825,708		$	600,983		$	57,120		$	(619,668	)	$	1,864,143

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Three Months Ended September 27, 2015
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	83,524		$	13,202		$	1,517		$	—		$	98,243
Entertainment and merchandise sales	112,266			3,808			2,679			—			118,753
Total company store sales	195,790			17,010			4,196			—			216,996
Franchise fees and royalties	493			4,438			10			—			4,941
International Association assessments and other fees	250			755			11,861			(12,866		)	—
Total revenues	196,533			22,203			16,067			(12,866		)	221,937
Operating Costs and Expenses:
Company store operating costs:
Cost of food and beverage	21,459			3,061			512			—			25,032
Cost of entertainment and merchandise	7,293			389			181			—			7,863
Total cost of food, beverage, entertainment and merchandise	28,752			3,450			693			—			32,895
Labor expenses	54,890			3,751			1,357			—			59,998
Depreciation and amortization	26,911			934			549			—			28,394
Rent expense	22,105			1,243			631			—			23,979
Other store operating expenses	34,362			2,215			1,042			(1,032		)	36,587
Total company store operating costs	167,020			11,593			4,272			(1,032		)	181,853
Advertising expense	12,368			798			8,960			(11,834		)	10,292
General and administrative expenses	3,856			12,154			130			—			16,140
Transaction and severance costs	200			78			—			—			278
Asset impairments	766			20			89			—			875
Total operating costs and expenses	184,210			24,643			13,451			(12,866		)	209,438
Operating income (loss)	12,323			(2,440		)	2,616			—			12,499
Equity in earnings (loss) in affiliates	(605		)	—			—			605			—
Interest expense (income)	16,728			365			116			—			17,209
Income (loss) before income taxes	(5,010		)	(2,805		)	2,500			605			(4,710		)
Income tax expense (benefit)	(1,808		)	(744		)	1,044			—			(1,508		)
Net income (loss)	$	(3,202	)	$	(2,061	)	$	1,456		$	605		$	(3,202	)
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(1,034	)	$	—		$	(1,034	)	$	1,034		$	(1,034	)
Total components of other comprehensive income (loss), net of tax	(1,034		)	—			(1,034		)	1,034			(1,034		)
Comprehensive income (loss)	$	(4,236	)	$	(2,061	)	$	422		$	1,639		$	(4,236	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Three Months Ended September 28, 2014
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	80,296		$	75		$	1,900		$	—		$	82,271
Entertainment and merchandise sales	112,560			—			3,325			—			115,885
Total company store sales	192,856			75			5,225			—			198,156
Franchise fees and royalties	526			1,007			—			—			1,533
International Association assessments and other fees	5,002			398			10,596			(15,996		)	—
Total revenues	198,384			1,480			15,821			(15,996		)	199,689
Operating Costs and Expenses:
Company store operating costs:
Cost of food and beverage	20,575			9			583			—			21,167
Cost of entertainment and merchandise	6,566			(8		)	223			(112		)	6,669
Total cost of food, beverage, entertainment and merchandise	27,141			1			806			(112		)	27,836
Labor expenses	55,414			—			1,672			—			57,086
Depreciation and amortization	30,673			—			949			—			31,622
Rent expense	21,800			—			787			—			22,587
Other store operating expenses	29,028			4,336			1,262			497			35,123
Total company store operating costs	164,056			4,337			5,476			385			174,254
Advertising expense	10,778			—			9,709			(10,373		)	10,114
General and administrative expenses	10,864			9,625			329			(6,998		)	13,820
Transaction and severance costs	5,757			(15		)	—			—			5,742
Total operating costs and expenses	191,455			13,947			15,514			(16,986		)	203,930
Operating income (loss)	6,929			(12,467		)	307			990			(4,241		)
Equity in earnings (loss) in affiliates	(10,913		)	—			—			10,913			—
Interest expense (income)	14,955			(123		)	152			990			15,974
Income (loss) before income taxes	(18,939		)	(12,344		)	155			10,913			(20,215		)
Income tax expense (benefit)	(5,660		)	(1,360		)	84			—			(6,936		)
Net income (loss)	$	(13,279	)	$	(10,984	)	$	71		$	10,913		$	(13,279	)
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(652	)	$	—		$	(652	)	$	652		$	(652	)
Total components of other comprehensive income (loss), net of tax	(652		)	—			(652		)	652			(652		)
Comprehensive income (loss)	$	(13,931	)	$	(10,984	)	$	(581	)	$	11,565		$	(13,931	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Nine Months Ended September 27, 2015
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	266,931		$	37,264		$	4,729		$	—		$	308,924
Entertainment and merchandise sales	357,509			11,799			8,050			—			377,358
Total company store sales	624,440			49,063			12,779			—			686,282
Franchise fees and royalties	1,794			11,437			10			—			13,241
International Association assessments and other fees	762			2,179			31,864			(34,805		)	—
Total revenues	626,996			62,679			44,653			(34,805		)	699,523
Operating Costs and Expenses:
Company store operating costs:
Cost of food and beverage	67,179			9,417			1,613			—			78,209
Cost of entertainment and merchandise	21,620			1,290			489			—			23,399
Total cost of food, beverage, entertainment and merchandise	88,799			10,707			2,102			—			101,608
Labor expenses	171,075			11,119			4,211			—			186,405
Depreciation and amortization	81,799			3,223			1,584			—			86,606
Rent expense	66,693			4,048			1,957			—			72,698
Other store operating expenses	99,032			6,147			3,223			(2,967		)	105,435
Total company store operating costs	507,398			35,244			13,077			(2,967		)	552,752
Advertising expense	33,506			3,121			31,550			(31,838		)	36,339
General and administrative expenses	14,631			37,168			400			—			52,199
Transaction and severance costs	15			345			—			—			360
Asset Impairment	766			20			89			—			875
Total operating costs and expenses	556,316			75,898			45,116			(34,805		)	642,525
Operating income (loss)	70,680			(13,219		)	(463		)	—			56,998
Equity in earnings (loss) in affiliates	(11,406		)	—			—			11,406			—
Interest expense (income)	50,032			1,619			380			—			52,031
Income (loss) before income taxes	9,242			(14,838		)	(843		)	11,406			4,967
Income tax expense (benefit)	7,594			(4,517		)	242			—			3,319
Net income (loss)	$	1,648		$	(10,321	)	$	(1,085	)	$	11,406		$	1,648
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(1,899	)	$	—		$	(1,899	)	$	1,899		$	(1,899	)
Total components of other comprehensive income (loss), net of tax	(1,899		)	—			(1,899		)	1,899			(1,899		)
Comprehensive income (loss)	$	(251	)	$	(10,321	)	$	(2,984	)	$	13,305		$	(251	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the 226 Day Period Ended September 28, 2014
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	219,044		$	196		$	4,957		$	—		$	224,197
Entertainment and merchandise sales	292,064			—			8,085			—			300,149
Total company store sales	511,108			196			13,042			—			524,346
Franchise fees and royalties	1,452			2,041			—			—			3,493
International Association assessments and other fees	10,502			1,822			27,964			(40,288		)	—
Total revenues	523,062			4,059			41,006			(40,288		)	527,839
Operating Costs and Expenses:
Company store operating costs:
Cost of food and beverage	55,705			38			1,507			—			57,250
Cost of entertainment and merchandise	17,013			(22		)	527			(92		)	17,426
Total cost of food, beverage, entertainment and merchandise	72,718			16			2,034			(92		)	74,676
Labor expenses	139,673			—			4,108			—			143,781
Depreciation and amortization	81,874			—			2,267			—			84,141
Rent expense	51,196			—			1,816			—			53,012
Other store operating expenses	81,398			9,955			2,654			(9,906		)	84,101
Total company store operating costs	426,859			9,971			12,879			(9,998		)	439,711
Advertising expense	28,513			(17		)	24,003			(27,697		)	24,802
General and administrative expenses	12,886			21,453			830			(2,593		)	32,576
Transaction and severance costs	37,271			5,992			—			—			43,263
Total operating costs and expenses	505,529			37,399			37,712			(40,288		)	540,352
Operating income (loss)	17,533			(33,340		)	3,294			—			(12,513		)
Equity in earnings (loss) in affiliates	(21,779		)	—			—			21,779			—
Interest expense (income)	42,907			(47		)	396			—			43,256
Income (loss) before income taxes	(47,153		)	(33,293		)	2,898			21,779			(55,769		)
Income tax expense (benefit)	(7,218		)	(9,321		)	705			—			(15,834		)
Net income (loss)	$	(39,935	)	$	(23,972	)	$	2,193		$	21,779		$	(39,935	)
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(151	)	$	—		$	(151	)	$	151		$	(151	)
Total components of other comprehensive income (loss), net of tax	(151		)	—			(151		)	151			(151		)
Comprehensive income (loss)	$	(40,086	)	$	(23,972	)	$	2,042		$	21,930		$	(40,086	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the 47 Day Period Ended February 14, 2014
(in thousands)
	Predecessor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	49,803		$	32		$	1,062		$	—		$	50,897
Entertainment and merchandise sales	61,082			—			1,577			—			62,659
Total company store sales	110,885			32			2,639			—			113,556
Franchise fees and royalties	353			334			—			—			687
International Association assessments and other fees	—			4,558			6,095			(10,653		)	—
Total revenues	111,238			4,924			8,734			(10,653		)	114,243
Operating Costs and Expenses:
Company store operating costs:
Cost of food and beverage	11,924			25			336			—			12,285
Cost of entertainment and merchandise	3,618			—			131			(20		)	3,729
Total cost of food, beverage, entertainment and merchandise	15,542			25			467			(20		)	16,014
Labor expenses	31,107			—			891			—			31,998
Depreciation and amortization	9,430			—			303			—			9,733
Rent expense	11,962			—			403			—			12,365
Other store operating expenses	20,193			(44		)	(82		)	(4,307		)	15,760
Total company store operating costs	88,234			(19		)	1,982			(4,327		)	85,870
Advertising expense	6,144			17			5,853			(6,111		)	5,903
General and administrative expenses	4,124			3,863			191			(215		)	7,963
Transaction and severance costs	1,800			9,834			—			—			11,634
Total operating costs and expenses	100,302			13,695			8,026			(10,653		)	111,370
Operating income (loss)	10,936			(8,771		)	708			—			2,873
Equity in earnings (loss) in affiliates	(4,523		)	—			—			4,523			—
Interest expense (income)	1,822			(771		)	100			—			1,151
Income (loss) before income taxes	4,591			(8,000		)	608			4,523			1,722
Income tax expense (benefit)	3,887			(3,040		)	171			—			1,018
Net income (loss)	$	704		$	(4,960	)	$	437		$	4,523		$	704
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(541	)	$	—		$	(541	)	$	541		$	(541	)
Total components of other comprehensive income (loss), net of tax	(541		)	—			(541		)	541			(541		)
Comprehensive income (loss)	$	163		$	(4,960	)	$	(104	)	$	5,064		$	163

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Nine Months Ended September 27, 2015
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by (used in) operating activities:	$	85,511		$	(1,253	)	$	4,040		$	—		$	88,298
Cash flows from investing activities:
Acquisition of Peter Piper Pizza	(663		)	—			—			—			(663		)
Intercompany note	(2,513		)	6,483			—			(3,970		)	—
Purchases of property and equipment	(48,932		)	(6,464		)	(1,598		)	—			(56,994		)
Development of internal use software	—			(2,784		)	—			—			(2,784		)
Other investing activities	261			—			—			—			261
Cash flows provided by (used in) investing activities	(51,847		)	(2,765		)	(1,598		)	(3,970		)	(60,180		)
Cash flows from financing activities:
Repayments on senior term loan	(5,700		)	—			—			—			(5,700		)
Repayments on note payable	—			(34		)	—			—			(34		)
Intercompany note	—			(2,048		)	(1,922		)	3,970			—
Payments on capital lease obligations	(306		)	—			(2		)	—			(308		)
Payments on sale leaseback transactions	(1,196		)	—			—			—			(1,196		)
Dividends paid	(70,000		)	—			—			—			(70,000		)
Cash flows provided by (used in) financing activities	(77,202		)	(2,082		)	(1,924		)	3,970			(77,238		)
Effect of foreign exchange rate changes on cash	—			—			(977		)	—			(977		)
Change in cash and cash equivalents	(43,538		)	(6,100		)	(459		)	—			(50,097		)
Cash and cash equivalents at beginning of period	97,020			6,427			7,547			—			110,994
Cash and cash equivalents at end of period	$	53,482		$	327		$	7,088		$	—		$	60,897

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the 226 Day Period Ended September 28, 2014
(in thousands)
	Successor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by (used in) operating activities:	$	93,262		$	(68,202	)	$	12,402		$	—		$	37,462
Cash flows from investing activities:
Acquisition of Predecessor	(946,898		)	—			—			—			(946,898		)
Acquisition of Franchisee	(1,529		)	—			—			—			(1,529		)
Intercompany note	(41,149		)	375,358			—			(334,209		)	—
Purchases of property and equipment	(31,845		)	(3,667		)	(3,354		)	—			(38,866		)
Proceeds from sale of property and equipment	—			350			—			—			350
Cash flows provided by (used in) investing activities	(1,021,421		)	372,041			(3,354		)	(334,209		)	(986,943		)
Cash flows from financing activities:
Proceeds from secured credit facilities, net of original issue discount	756,200			—			—			—			756,200
Proceeds from senior notes	255,000			—			—			—			255,000
Repayment of Predecessor Facility	—			(348,000		)	—			—			(348,000		)
Repayments on senior term loan	(1,900		)	—			—			—			(1,900		)
Intercompany note	(375,539		)	44,055			(2,725		)	334,209			—
Proceeds from financing sale-leaseback transaction	183,685			—			—			—			183,685
Payment of debt financing costs	(27,575		)	—			—			—			(27,575		)
Payments on capital lease obligations	(204		)	—			—			—			(204		)
Dividends paid	(890		)	—			—			—			(890		)
Excess tax benefit realized from stock-based compensation	5,043			—			—			—			5,043
Equity contribution	350,000			—			—			—			350,000
Cash flows provided by (used in) financing activities	1,143,820			(303,945		)	(2,725		)	334,209			1,171,359
Effect of foreign exchange rate changes on cash	—			—			(77		)	—			(77		)
Change in cash and cash equivalents	215,661			(106		)	6,246			—			221,801
Cash and cash equivalents at beginning of period	6,653			120			12,411			—			19,184
Cash and cash equivalents at end of period	$	222,314		$	14		$	18,657		$	—		$	240,985

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the 47 Day Period Ended February 14, 2014
(in thousands)
	Predecessor
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by (used in) operating activities:	$	(12,224	)	$	29,906		$	4,632		$	—		$	22,314
Cash flows from investing activities:
Intercompany note	—			(17,601		)	—			17,601			—
Purchases of property and equipment	(8,538		)	(1,082		)	(90		)	—			(9,710		)
Proceeds from sale of property and equipment	(2		)	53			—			—			51
Cash flows provided by (used in) investing activities	(8,540		)	(18,630		)	(90		)	17,601			(9,659		)
Cash flows from financing activities:
Net proceeds from (repayments on) revolving credit facility	—			(13,500		)	—			—			(13,500		)
Intercompany note	17,571			430			(400		)	(17,601		)	—
Payments on capital lease obligations	(153		)	—			(11		)	—			(164		)
Dividends paid	(38		)	—			—			—			(38		)
Restricted stock returned for payment of taxes	(142		)	—			—			—			(142		)
Cash flows provided by (used in) financing activities	17,238			(13,070		)	(411		)	(17,601		)	(13,844		)
Effect of foreign exchange rate changes on cash	—			—			(313		)	—			(313		)
Change in cash and cash equivalents	(3,526		)	(1,794		)	3,818			—			(1,502		)
Cash and cash equivalents at beginning of period	10,177			1,914			8,595			—			20,686
Cash and cash equivalents at end of period	$	6,651		$	120		$	12,413		$	—		$	19,184