Condensed Consolidating Schedules

6 Months Ended

Jul. 02, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Consolidating Guarantor Financial Information:

On February 14, 2014, CEC Entertainment, Inc. merged with and into an entity controlled by Apollo Global Management, LLC and its subsidiaries, which we refer to as the “Merger”. 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.
Consolidating Statement of Comprehensive Income (Loss)
For the Six Months Ended July 2, 2017
(in thousands)
	Issuer		Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	190,998	$	27,725		$	3,107		$	—		$	221,830
Entertainment and merchandise sales	207,645		32,923			5,073			—			245,641
Total company venue sales	398,643		60,648			8,180			—			467,471
Franchise fees and royalties	904		8,368			—			—			9,272
International Association assessments and other fees	689		21,088			18,607			(40,384		)	—
Total revenues	400,236		90,104			26,787			(40,384		)	476,743
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	42,931		7,152			957			—			51,040
Cost of entertainment and merchandise	14,230		804			307			—			15,341
Total cost of food, beverage, entertainment and merchandise	57,161		7,956			1,264			—			66,381
Labor expenses	114,837		9,379			2,522			—			126,738
Depreciation and amortization	49,374		1,882			947			—			52,203
Rent expense	43,104		3,053			1,068			—			47,225
Other venue operating expenses	85,680		6,545			2,295			(21,804		)	72,716
Total company venue operating costs	350,156		28,815			8,096			(21,804		)	365,263
Advertising expense	19,252		3,259			21,688			(18,580		)	25,619
General and administrative expenses	10,807		21,741			267			—			32,815
Transaction, severance and related litigation costs	570		—			—			—			570
Total operating costs and expenses	380,785		53,815			30,051			(40,384		)	424,267
Operating income (loss)	19,451		36,289			(3,264		)	—			52,476
Equity in earnings (loss) in affiliates	38,647		—			—			(38,647		)	—
Interest expense (income)	31,828		1,992			303			—			34,123
Income (loss) before income taxes	26,270		34,297			(3,567		)	(38,647		)	18,353
Income tax expense (benefit)	14,978		(6,803		)	(1,114		)	—			7,061
Net income (loss)	$	11,292	$	41,100		$	(2,453	)	$	(38,647	)	$	11,292
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	539		—			539			(539		)	539
Comprehensive income (loss)	$	11,831	$	41,100		$	(1,914	)	$	(39,186	)	$	11,831

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Six Months Ended July 3, 2016
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	191,834		$	24,888		$	2,885		$	—		$	219,607
Entertainment and merchandise sales	245,886			11,448			4,880			—			262,214
Total company venue sales	437,720			36,336			7,765			—			481,821
Franchise fees and royalties	1,268			7,850						—			9,118
International Association assessments and other fees	462			1,230			20,315			(22,007		)	—
Total revenues	439,450			45,416			28,080			(22,007		)	490,939
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	47,658			6,438			1,099			—			55,195
Cost of entertainment and merchandise	15,757			902			330			—			16,989
Total cost of food, beverage, entertainment and merchandise	63,415			7,340			1,429			—			72,184
Labor expenses	119,109			7,802			2,537			—			129,448
Depreciation and amortization	55,158			1,235			969			—			57,362
Rent expense	44,367			2,712			1,120			—			48,199
Other venue operating expenses	68,639			4,536			1,930			(1,718		)	73,387
Total company venue operating costs	350,688			23,625			7,985			(1,718		)	380,580
Advertising expense	21,222			2,719			21,609			(20,289		)	25,261
General and administrative expenses	12,928			20,726			285			—			33,939
Transaction, severance and related litigation costs	1,129			55			—			—			1,184
Total operating costs and expenses	385,967			47,125			29,879			(22,007		)	440,964
Operating income (loss)	53,483			(1,709		)	(1,799		)	—			49,975
Equity in earnings (loss) in affiliates	(5,795		)	—			—			5,795			—
Interest expense	32,081			1,887			214			—			34,182
Income (loss) before income taxes	15,607			(3,596		)	(2,013		)	5,795			15,793
Income tax expense (benefit)	6,744			751			(565		)	—			6,930
Net income (loss)	$	8,863		$	(4,347	)	$	(1,448	)	$	5,795		$	8,863
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	915			—			915			(915		)	915
Comprehensive income (loss)	$	9,778		$	(4,347	)	$	(533	)	$	4,880		$	9,778

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Six Months Ended July 2, 2017
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Cash flows provided by (used in) operating activities:	$	55,867		$	20,594		$	294		$	—	$	76,755
Cash flows from investing activities:
Purchases of property and equipment	(32,066		)	(14,330		)	(649		)	—		(47,045		)
Development of internal use software	—			(2,075		)	—			—		(2,075		)
Proceeds from sale of property and equipment	237			—			—			—		237
Cash flows provided by (used in) investing activities	(31,829		)	(16,405		)	(649		)	—		(48,883		)
Cash flows from financing activities:
Repayments on senior term loan	(3,800		)	—			—			—		(3,800		)
Repayments on note payable	—			(13		)	—			—		(13		)
Proceeds from sale-leaseback transaction	4,073			—			—			—		4,073
Payments on capital lease obligations	(215		)	—			(3		)	—		(218		)
Payments on sale leaseback transactions	(1,161		)	—			—			—		(1,161		)
Return of capital	1,447			—			—			—		1,447
Cash flows provided by (used in) financing activities	344			(13		)	(3		)	—		328
Effect of foreign exchange rate changes on cash	—			—			239			—		239
Change in cash and cash equivalents	24,382			4,176			(119		)	—		28,439
Cash and cash equivalents at beginning of period	53,088			1,158			6,777			—		61,023
Cash and cash equivalents at end of period	$	77,470		$	5,334		$	6,658		$	—	$	89,462

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Six Months Ended July 3, 2016
(in thousands)
	Issuer				Guarantors				Non-Guarantors				Eliminations			Consolidated
Cash flows provided by (used in) operating activities:	$	66,349			$	11,899			$	(510	)		$	—		$	77,738
Cash flows from investing activities:
Purchases of property and equipment	(31,814		)		(10,459		)		(127		)		—			(42,400		)
Development of internal use software	(3,439		)		(2,784		)		—				—			(6,223		)
Proceeds from the sale of property and equipment	—				318				—				—			318
Cash flows provided by (used in) investing activities	(35,253		)	—	(12,925		)	—	(127		)	—	—		—	(48,305		)
Cash flows from financing activities:
Repayments on senior term loan	(3,800		)		—				—				—			(3,800		)
Repayments on note payable	—				(24		)		—				—			(24		)
Payments on capital lease obligations	(202		)		—				(2		)		—			(204		)
Payments on sale leaseback transactions	(956		)		—				—				—			(956		)
Excess tax benefit realized from stock-based compensation	4				—				—				—			4
Cash flows provided by (used in) financing activities	(4,954		)	—	(24		)	—	(2		)	—	—		—	(4,980		)
Effect of foreign exchange rate changes on cash	—				—				484				—			484
Change in cash and cash equivalents	26,142			—	(1,050		)	—	(155		)	—	—		—	24,937
Cash and cash equivalents at beginning of period	42,235				1,797				6,622				—			50,654
Cash and cash equivalents at end of period	$	68,377			$	747			$	6,467			$	—		$	75,591