Condensed Consolidating Schedules

6 Months Ended

Jul. 01, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements

Consolidating Guarantor Financial Information:

On February 14, 2014, CEC Entertainment, Inc. (the “Issuer”) 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 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 1, 2018
(in thousands)
	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	184,259		$	27,396	$	2,980		$	—		$	214,635
Entertainment and merchandise sales	215,770			25,874		5,377			—			247,021
Total company venue sales	400,029			53,270		8,357			—			461,656
Franchise fees and royalties	1,000			8,359		1,247			—			10,606
International Association assessments and other fees	574			18,751		19,090			(38,415		)	—
Total revenues	401,603			80,380		28,694			(38,415		)	472,262
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	41,733			7,497		1,024			—			50,254
Cost of entertainment and merchandise	16,665			848		289			—			17,802
Total cost of food, beverage, entertainment and merchandise	58,398			8,345		1,313			—			68,056
Labor expenses	117,290			10,088		2,588			—			129,966
Rent expense	43,697			4,008		1,059			—			48,764
Other venue operating expenses	85,295			7,382		1,806			(19,351		)	75,132
Total company venue operating costs	304,680			29,823		6,766			(19,351		)	321,918
Advertising expense	19,758			3,361		22,897			(19,064		)	26,952
General and administrative expenses	8,521			16,837		967			—			26,325
Depreciation and amortization	45,645			5,445		975			—			52,065
Transaction, severance and related litigation costs	459			266		—			—			725
Asset Impairments	86			1,505		—			—			1,591
Total operating costs and expenses	379,149			57,237		31,605			(38,415		)	429,576
Operating income (loss)	22,454			23,143		(2,911		)	—			42,686
Equity in earnings (loss) in affiliates	14,423			—		—			(14,423		)	—
Interest expense	35,627			1,755		289			—			37,671
Income (loss) before income taxes	1,250			21,388		(3,200		)	(14,423		)	5,015
Income tax expense	(2,006		)	4,414		(649		)	—			1,759
Net income (loss)	$	3,256		$	16,974	$	(2,551	)	$	(14,423	)	$	3,256
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	300			—		300			(300		)	300
Comprehensive income (loss)	$	3,556		$	16,974	$	(2,251	)	$	(14,723	)	$	3,556

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
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	300,782		26,933			7,149			(21,804		)	313,060
Advertising expense	19,252		3,259			21,688			(18,580		)	25,619
General and administrative expenses	10,137		18,803			150			—			29,090
Depreciation and amortization	50,044		4,820			1,064			—			55,928
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	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