Condensed Consolidating Schedules (Tables)

6 Months Ended

Jul. 01, 2018

Condensed Financial Information Disclosure [Abstract]



CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of July 1, 2018
(in thousands)

	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	86,234		$	1,884	$	769		$	—		$	88,887
Restricted cash	—			—		207			—			207
Accounts receivable	20,823			2,748		4,665			(4,009		)	24,227
Inventories	16,361			4,041		269			—			20,671
Prepaid expenses	14,360			13,083		1,302			—			28,745
Total current assets	137,778			21,756		7,212			(4,009		)	162,737
Property and equipment, net	474,661			72,528		6,591			—			553,780
Goodwill	433,024			51,414		—			—			484,438
Intangible assets, net	15,692			462,990		—			—			478,682
Intercompany	76,325			—		—			(76,325		)	—
Investment in subsidiaries	477,703			—		—			(477,703		)	—
Other noncurrent assets	7,870			10,111		81			—			18,062
Total assets	$	1,623,053		$	618,799	$	13,884		$	(558,037	)	$	1,697,699
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	—	$	—		$	—		$	7,600
Capital lease obligations, current portion	624			—		10			—			634
Accounts payable and accrued expenses	55,843			39,717		4,389			—			99,949
Other current liabilities	4,490			510		—			—			5,000
Total current liabilities	68,557			40,227		4,399			—			113,183
Capital lease obligations, less current portion	12,627			—		47			—			12,674
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	963,243			—		—			—			963,243
Deferred tax liability	96,539			16,056		(1,923		)	—			110,672
Intercompany	—			53,341		26,993			(80,334		)	—
Other noncurrent liabilities	216,150			15,379		461			—			231,990
Total liabilities	1,357,116			125,003		29,977			(80,334		)	1,431,762
Stockholder's equity:
Common stock	—			—		—			—			—
Capital in excess of par value	359,466			466,115		3,241			(469,356		)	359,466
Retained earnings (deficit)	(91,943		)	27,681		(17,748		)	(9,933		)	(91,943		)
Accumulated other comprehensive income (loss)	(1,586		)	—		(1,586		)	1,586			(1,586		)
Total stockholder's equity	265,937			493,796		(16,093		)	(477,703		)	265,937
Total liabilities and stockholder's equity	$	1,623,053		$	618,799	$	13,884		$	(558,037	)	$	1,697,699



CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of December 31, 2017
(in thousands)

	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	59,948		$	410	$	6,842		$	—		$	67,200
Restricted cash	—			—		112			—			112
Accounts receivable	27,098			3,283		2,563			(1,923		)	31,021
Inventories	17,104			4,614		282			—			22,000
Prepaid expenses	13,766			5,549		1,083			—			20,398
Total current assets	117,916			13,856		10,882			(1,923		)	140,731
Property and equipment, net	496,725			66,669		6,627			—			570,021
Goodwill	433,024			51,414		—			—			484,438
Intangible assets, net	16,764			463,613		—			—			480,377
Intercompany	90,937			10,770		—			(101,707		)	—
Investment in subsidiaries	462,873			—		—			(462,873		)	—
Other noncurrent assets	7,913			11,359		205			—			19,477
Total assets	$	1,626,152		$	617,681	$	17,714		$	(566,503	)	$	1,695,044
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	—	$	—		$	—		$	7,600
Capital lease obligations, current portion	586			—		10			—			596
Accounts payable and accrued expenses	58,014			35,134		4,169			—			97,317
Other current liabilities	4,265			511		—			—			4,776
Total current liabilities	70,465			35,645		4,179			—			110,289
Capital lease obligations, less current portion	12,956			—		54			—			13,010
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	965,213			—		—			—			965,213
Deferred tax liability	99,083			16,697		(1,594		)	—			114,186
Intercompany	—			75,052		28,578			(103,630		)	—
Other noncurrent liabilities	216,287			13,465		446			—			230,198
Total liabilities	1,364,004			140,859		31,663			(103,630		)	1,432,896
Stockholder's equity:
Common stock	—			—		—			—			—
Capital in excess of par value	359,233			466,114		3,241			(469,355		)	359,233
Retained earnings (deficit)	(95,199		)	10,708		(15,304		)	4,596			(95,199		)
Accumulated other comprehensive income (loss)	(1,886		)	—		(1,886		)	1,886			(1,886		)
Total stockholder's equity	262,148			476,822		(13,949		)	(462,873		)	262,148
Total liabilities and stockholder's equity	$	1,626,152		$	617,681	$	17,714		$	(566,503	)	$	1,695,044

Condensed Consolidating Income Statement



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

Condensed Consolidating Cash Flow Statement



CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Six Months Ended July 1, 2018
(in thousands)

	Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Cash flows provided by operating activities:	$	55,435		$	14,473		$	(4,883	)	$	—	$	65,025

Cash flows from investing activities:
Purchases of property and equipment	(22,876		)	(12,792		)	(1,140		)	—		(36,808		)
Development of internal use software	(973		)	(49		)	—			—		(1,022		)
Proceeds from sale of property and equipment	570			(158		)	—			—		412
Cash flows provided by (used in) investing activities	(23,279		)	(12,999		)	(1,140		)	—		(37,418		)

Cash flows from financing activities:
Repayments on senior term loan	(3,800		)	—			—			—		(3,800		)
Payment of debt financing costs	(395		)	—			—			—		(395		)
Payments on capital lease obligations	(291		)	—			(4		)	—		(295		)
Payments on sale leaseback transactions	(1,384		)	—			—			—		(1,384		)
Cash flows provided by (used in) financing activities	(5,870		)	—			(4		)	—		(5,874		)
Effect of foreign exchange rate changes on cash	—			—			49			—		49
Change in cash, cash equivalents and restricted cash	26,286			1,474			(5,978		)	—		21,782
Cash, cash equivalents and restricted cash at beginning of period	59,948			410			6,954			—		67,312
Cash, cash equivalents and restricted cash at end of period	$	86,234		$	1,884		$	976		$	—	$	89,094



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			$	141			$	—		$	76,602

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 the 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, cash equivalents and restricted cash	24,382			—	4,176			—	(272		)	—	—		—	28,286
Cash, cash equivalents and restricted cash at beginning of period	53,088				1,158				7,045				—			61,291
Cash, cash equivalents and restricted cash at end of period	$	77,470			$	5,334			$	6,773			$	—		$	89,577