Condensed Consolidating Schedules (Tables)

6 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]



CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of June 30, 2019
(in thousands)

	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	104,179		$	7,236	$	2,221		$	—		$	113,636
Restricted cash	—			—		182			—			182
Accounts receivable	13,600			6,393		4,689			(4,006		)	20,676
Inventories	19,184			5,980		301			—			25,465
Prepaid expenses	8,090			11,779		1,383			—			21,252
Total current assets	145,053			31,388		8,776			(4,006		)	181,211
Property and equipment, net	450,358			67,913		5,346			—			523,617
Operating lease right-of-use assets, net	479,758			47,267		10,006			—			537,031
Goodwill	433,024			51,414		—			—			484,438
Intangible assets, net	8,368			461,362		—			—			469,730
Intercompany	53,882			87,166		—			(141,048		)	—
Investment in subsidiaries	497,187			—		—			(497,187		)	—
Other noncurrent assets	6,913			10,854		14			—			17,781
Total assets	$	2,074,543		$	757,364	$	24,142		$	(642,241	)	$	2,213,808
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	—	$	—		$	—		$	7,600
Operating lease liability, current portion	43,701			3,552		1,128			—			48,381
Accounts payable, accrued expenses and unearned revenues	60,090			44,790		3,981			—			108,861
Other current liabilities	4,381			—		16			—			4,397
Total current liabilities	115,772			48,342		5,125			—			169,239
Operating lease obligations, less current portion	459,293			55,072		9,233			—			523,598
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	959,874			—		—			—			959,874
Deferred tax liability	90,098			18,201		(1,653		)	—			106,646
Intercompany	—			117,590		27,464			(145,054		)	—
Other noncurrent liabilities	194,411			4,915		30			—			199,356
Total liabilities	1,819,448			244,120		40,199			(145,054		)	1,958,713
Stockholder's equity:
Common stock	—			—		—			—			—
Capital in excess of par value	359,867			466,114		3,241			(469,355		)	359,867
Retained earnings (deficit)	(103,148		)	47,130		(17,674		)	(29,456		)	(103,148		)
Accumulated other comprehensive income (loss)	(1,624		)	—		(1,624		)	1,624			(1,624		)
Total stockholder's equity	255,095			513,244		(16,057		)	(497,187		)	255,095
Total liabilities and stockholder's equity	$	2,074,543		$	757,364	$	24,142		$	(642,241	)	$	2,213,808



CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of December 30, 2018
(in thousands)

	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	54,775		$	6,725	$	1,670		$	—		$	63,170
Restricted cash	—			—		151			—			151
Accounts receivable	28,421			4,956		4,117			(3,314		)	34,180
Inventories	16,896			6,617		294			—			23,807
Prepaid expenses	14,264			10,562		598			—			25,424
Total current assets	114,356			28,860		6,830			(3,314		)	146,732
Property and equipment, net	468,827			64,721		5,637			—			539,185
Goodwill	433,024			51,414		—			—			484,438
Intangible assets, net	14,716			462,369		—			—			477,085
Intercompany	78,402			66,373		—			(144,775		)	—
Investment in subsidiaries	477,556			—		—			(477,556		)	—
Other noncurrent assets	7,292			11,409		24			—			18,725
Total assets	$	1,594,173		$	685,146	$	12,491		$	(625,645	)	$	1,666,165
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	—	$	—		$	—		$	7,600
Accounts payable, accrued expenses and unearned revenues	56,277			34,429		2,321			—			93,027
Other current liabilities	5,429			510		16			—			5,955
Total current liabilities	69,306			34,939		2,337			—			106,582
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	961,514			—		—			—			961,514
Deferred tax liability	91,049			17,866		(1,857		)	—			107,058
Intercompany	—			119,498		28,591			(148,089		)	—
Other noncurrent liabilities	229,733			18,191		516			—			248,440
Total liabilities	1,351,602			190,494		29,587			(148,089		)	1,423,594
Stockholder's equity:
Common stock	—			—		—			—			—
Capital in excess of par value	359,570			466,114		3,241			(469,355		)	359,570
Retained earnings (deficit)	(115,660		)	28,538		(18,691		)	(9,847		)	(115,660		)
Accumulated other comprehensive income (loss)	(1,339		)	—		(1,646		)	1,646			(1,339		)
Total stockholder's equity	242,571			494,652		(17,096		)	(477,556		)	242,571
Total liabilities and stockholder's equity	$	1,594,173		$	685,146	$	12,491		$	(625,645	)	$	1,666,165

Condensed Consolidating Income Statement



CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Six Months Ended June 30, 2019
(in thousands)

	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	179,290		$	27,550	$	2,626		$	—		$	209,466
Entertainment and merchandise sales	238,159			23,915		5,016			—			267,090
Total company venue sales	417,449			51,465		7,642			—			476,556
Franchise fees and royalties	1,336			8,986		1,611			—			11,933
International Association assessments and other fees	578			22,225		19,929			(42,732		)	—
Total revenues	419,363			82,676		29,182			(42,732		)	488,489
Operating Costs and Expenses:
Company venue operating costs (excluding Depreciation and amortization):
Cost of food and beverage	39,805			7,235		897			—			47,937
Cost of entertainment and merchandise	19,870			870		458			—			21,198
Total cost of food, beverage, entertainment and merchandise	59,675			8,105		1,355			—			69,135
Labor expenses	124,234			9,744		2,502			—			136,480
Lease costs	49,644			3,722		1,177			—			54,543
Other venue operating expenses	81,543			7,625		1,610			(22,828		)	67,950
Total company venue operating costs	315,096			29,196		6,644			(22,828		)	328,108
Advertising expense	19,913			2,975		20,246			(19,904		)	23,230
General and administrative expenses	9,655			20,736		(498		)	—			29,893
Depreciation and amortization	42,695			4,938		819			—			48,452
Transaction, severance and related litigation costs	31			—		—			—			31
Asset Impairments	1,111			174		—			—			1,285
Total operating costs and expenses	388,501			58,019		27,211			(42,732		)	430,999
Operating income	30,862			24,657		1,971			—			57,490
Equity in earnings in affiliates	20,019			—		—			(20,019		)	—
Interest expense	37,943			1,505		339			—			39,787
Income before income taxes	12,938			23,152		1,632			(20,019		)	17,703
Income tax expense	426			4,559		206			—			5,191
Net income	$	12,512		$	18,593	$	1,426		$	(20,019	)	$	12,512

Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(285		)	—		(285		)	285			(285		)
Comprehensive income (loss)	$	12,227		$	18,593	$	1,141		$	(19,734	)	$	12,227



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 (excluding Depreciation and amortization):
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
Lease costs	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 impairment	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 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

Condensed Consolidating Cash Flow Statement



CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2019
(in thousands)

	Issuer			Guarantors			Non-Guarantors			Consolidated
Cash flows provided by operating activities:	$	81,583		$	8,563		$	926		$	91,072

Cash flows from investing activities:
Purchases of property and equipment	(26,381		)	(7,625		)	(336		)	(34,342		)
Development of internal use software	(182		)	(427		)	—			(609		)
Proceeds from sale of property and equipment	141			—			—			141
Cash flows used in investing activities	(26,422		)	(8,052		)	(336		)	(34,810		)

Cash flows from financing activities:
Repayments on senior term loan	(3,800		)	—			—			(3,800		)
Payments on financing lease obligations	(338		)	—			(6		)	(344		)
Payments on sale leaseback transactions	(1,619		)	—			—			(1,619		)
Cash flows used in financing activities	(5,757		)	—			(6		)	(5,763		)
Effect of foreign exchange rate changes on cash	—			—			(2		)	(2		)
Change in cash, cash equivalents and restricted cash	49,404			511			582			50,497
Cash, cash equivalents and restricted cash at beginning of period	54,775			6,725			1,821			63,321
Cash, cash equivalents and restricted cash at end of period	$	104,179		$	7,236		$	2,403		$	113,818



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

	Issuer				Guarantors				Non-Guarantors				Consolidated
Cash flows provided by (used in) 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 the sale of property and equipment	570				(158		)		—				412
Cash flows 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 financing lease obligations	(291		)		—				(4		)		(295		)
Payments on sale leaseback transactions	(1,384		)		—				—				(1,384		)
Cash flows 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