Condensed Consolidating Schedules (Tables)

9 Months Ended

Oct. 01, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of October 1, 2017
(in thousands)
	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	70,041		$	1,850	$	7,536		$	—		$	79,427
Restricted cash	—			—		219			—			219
Accounts receivable	13,676			2,644		4,040			(3,274		)	17,086
Inventories	18,480			3,859		285			—			22,624
Prepaid expenses	13,683			5,359		1,445			—			20,487
Total current assets	115,880			13,712		13,525			(3,274		)	139,843
Property and equipment, net	513,147			63,203		6,578			—			582,928
Goodwill	433,024			51,414		—			—			484,438
Intangible assets, net	17,337			463,941		—			—			481,278
Intercompany	84,420			—		—			(84,420		)	—
Investment in subsidiaries	465,766			—		—			(465,766		)	—
Other noncurrent assets	7,747			12,180		243			—			20,170
Total assets	$	1,637,321		$	604,450	$	20,346		$	(553,460	)	$	1,708,657
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	—	$	—		$	—		$	7,600
Capital lease obligations, current portion	562			—		9			—			571
Accounts payable and accrued expenses	60,104			30,447		5,096			—			95,647
Other current liabilities	4,155			511		—			—			4,666
Total current liabilities	72,421			30,958		5,105			—			108,484
Capital lease obligations, less current portion	13,105			—		57			—			13,162
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	965,976			—		—			—			965,976
Deferred tax liability	159,582			24,022		(2,815		)	—			180,789
Intercompany	—			60,498		27,196			(87,694		)	—
Other noncurrent liabilities	216,867			13,588		421			—			230,876
Total liabilities	1,427,951			129,066		29,964			(87,694		)	1,499,287
Stockholder's equity:
Common stock	—			—		—			—			—
Capital in excess of par value	359,144			466,114		3,241			(469,355		)	359,144
Retained earnings (deficit)	(148,065		)	9,270		(11,150		)	1,880			(148,065		)
Accumulated other comprehensive income (loss)	(1,709		)	—		(1,709		)	1,709			(1,709		)
Total stockholder's equity	209,370			475,384		(9,618		)	(465,766		)	209,370
Total liabilities and stockholder's equity	$	1,637,321		$	604,450	$	20,346		$	(553,460	)	$	1,708,657

CEC Entertainment, Inc.
Condensed Consolidating Balance Sheet
As of January 1, 2017
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Current assets:
Cash and cash equivalents	$	53,088		$	1,158		$	6,777		$	—		$	61,023
Restricted cash	—			—			268			—			268
Accounts receivable	16,922			3,220			2,455			(2,102		)	20,495
Inventories	18,255			3,151			271			—			21,677
Prepaid expenses	14,294			6,077			1,127			—			21,498
Total current assets	102,559			13,606			10,898			(2,102		)	124,961
Property and equipment, net	538,195			47,906			6,785			—			592,886
Goodwill	432,462			51,414			—			—			483,876
Intangible assets, net	19,157			464,926			—			—			484,083
Intercompany	127,107			317			—			(127,424		)	—
Investment in subsidiaries	436,483			—			—			(436,483		)	—
Other noncurrent assets	6,888			17,025			393			—			24,306
Total assets	$	1,662,851		$	595,194		$	18,076		$	(566,009	)	$	1,710,112
Current liabilities:
Bank indebtedness and other long-term debt, current portion	$	7,600		$	13		$	—		$	—		$	7,613
Capital lease obligations, current portion	460			—			7			—			467
Accounts payable and accrued expenses	84,207			11,445			2,184			—			97,836
Other current liabilities	3,764			511			—			—			4,275
Total current liabilities	96,031			11,969			2,191			—			110,191
Capital lease obligations, less current portion	13,542			—			60			—			13,602
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion	968,266			—			—			—			968,266
Deferred tax liability	166,064			21,234			(1,008		)	—			186,290
Intercompany	—			106,131			23,395			(129,526		)	—
Other noncurrent liabilities	212,943			12,484			331			—			225,758
Total liabilities	1,456,846			151,818			24,969			(129,526		)	1,504,107
Stockholder's equity:
Common stock	—			—			—			—			—
Capital in excess of par value	357,166			466,114			3,241			(469,355		)	357,166
Retained earnings (deficit)	(148,265		)	(22,738		)	(7,238		)	29,976			(148,265		)
Accumulated other comprehensive income (loss)	(2,896		)	—			(2,896		)	2,896			(2,896		)
Total stockholder's equity	206,005			443,376			(6,893		)	(436,483		)	206,005
Total liabilities and stockholder's equity	$	1,662,851		$	595,194		$	18,076		$	(566,009	)	$	1,710,112

Condensed Consolidating Income Statement

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Three Months Ended October 1, 2017
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	83,413		$	13,234		$	1,608		$	—		$	98,255
Entertainment and merchandise sales	88,551			19,174			2,908			—			110,633
Total company venue sales	171,964			32,408			4,516			—			208,888
Franchise fees and royalties	506			3,953			—			—			4,459
International Association assessments and other fees	364			7,702			8,294			(16,360		)	—
Total revenues	172,834			44,063			12,810			(16,360		)	213,347
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	19,916			3,519			539			—			23,974
Cost of entertainment and merchandise	6,807			432			191			—			7,430
Total cost of food, beverage, entertainment and merchandise	26,723			3,951			730			—			31,404
Labor expenses	55,252			4,729			1,239			—			61,220
Depreciation and amortization	23,789			1,064			436			—			25,289
Rent expense	22,066			1,624			569			—			24,259
Other venue operating expenses	43,731			3,817			1,079			(8,066		)	40,561
Total company venue operating costs	171,561			15,185			4,053			(8,066		)	182,733
Advertising expense	8,670			1,085			10,622			(8,294		)	12,083
General and administrative expenses	4,863			10,454			105			—			15,422
Transaction, severance and related litigation costs	128			—			—			—			128
Asset impairments	1,824			14			5						1,843
Total operating costs and expenses	187,046			26,738			14,785			(16,360		)	212,209
Operating income (loss)	(14,212		)	17,325			(1,975		)	—			1,138
Equity in earnings (loss) in affiliates	(10,551		)	—			—			10,551			—
Interest expense	15,902			1,353			196			—			17,451
Income (loss) before income taxes	(40,665		)	15,972			(2,171		)	10,551			(16,313		)
Income tax expense (benefit)	(29,573		)	25,067			(715		)	—			(5,221		)
Net income (loss)	$	(11,092	)	$	(9,095	)	$	(1,456	)	$	10,551		$	(11,092	)
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	648			—			648			(648		)	648
Comprehensive income (loss)	$	(10,444	)	$	(9,095	)	$	(808	)	$	9,903		$	(10,444	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Three Months Ended October 2, 2016
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	88,557		$	11,892		$	1,535		$	—		$	101,984
Entertainment and merchandise sales	112,306			6,703			2,755			—			121,764
Total company venue sales	200,863			18,595			4,290			—			223,748
Franchise fees and royalties	292			4,030			—			—			4,322
International Association assessments and other fees	273			615			8,431			(9,319		)	—
Total revenues	201,428			23,240			12,721			(9,319		)	228,070
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	21,773			3,194			540			—			25,507
Cost of entertainment and merchandise	7,391			428			195			—			8,014
Total cost of food, beverage, entertainment and merchandise	29,164			3,622			735			—			33,521
Labor expenses	56,386			4,039			1,296			—			61,721
Depreciation and amortization	26,501			650			516			—			27,667
Rent expense	22,235			1,331			554			—			24,120
Other venue operating expenses	35,659			3,033			953			(888		)	38,757
Total company venue operating costs	169,945			12,675			4,054			(888		)	185,786
Advertising expense	8,967			828			10,151			(8,431		)	11,515
General and administrative expenses	6,741			10,270			273			—			17,284
Transaction, severance and related litigation costs	166			—			—			—			166
Asset impairments	709			—			63			—			772
Total operating costs and expenses	186,528			23,773			14,541			(9,319		)	215,523
Operating income (loss)	14,900			(533		)	(1,820		)	—			12,547
Equity in earnings (loss) in affiliates	(2,299		)	—			—			2,299			—
Interest expense	15,685			1,440			112			—			17,237
Income (loss) before income taxes	(3,084		)	(1,973		)	(1,932		)	2,299			(4,690		)
Income tax expense (benefit)	(680		)	(935		)	(671		)	—			(2,286		)
Net income (loss)	$	(2,404	)	$	(1,038	)	$	(1,261	)	$	2,299		$	(2,404	)
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(212		)	—			(212		)	212			(212		)
Comprehensive income (loss)	$	(2,616	)	$	(1,038	)	$	(1,473	)	$	2,511		$	(2,616	)

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Nine Months Ended October 1, 2017
(in thousands)
	Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	274,411		$	40,959	$	4,715		$	—		$	320,085
Entertainment and merchandise sales	296,197			52,097		7,980			—			356,274
Total company venue sales	570,608			93,056		12,695			—			676,359
Franchise fees and royalties	1,411			12,320		—			—			13,731
International Association assessments and other fees	1,054			28,791		26,900			(56,745		)	—
Total revenues	573,073			134,167		39,595			(56,745		)	690,090
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	62,847			10,671		1,496			—			75,014
Cost of entertainment and merchandise	21,037			1,236		498			—			22,771
Total cost of food, beverage, entertainment and merchandise	83,884			11,907		1,994			—			97,785
Labor expenses	170,089			14,108		3,761			—			187,958
Depreciation and amortization	73,162			2,946		1,384			—			77,492
Rent expense	65,168			4,678		1,638			—			71,484
Other venue operating expenses	129,415			10,360		3,373			(29,871		)	113,277
Total company venue operating costs	521,718			43,999		12,150			(29,871		)	547,996
Advertising expense	27,921			4,345		32,310			(26,874		)	37,702
General and administrative expenses	15,672			32,194		371			—			48,237
Transaction, severance and related litigation costs	698			—		—			—			698
Asset Impairments	1,824			14		5			—			1,843
Total operating costs and expenses	567,833			80,552		44,836			(56,745		)	636,476
Operating income (loss)	5,240			53,615		(5,241		)	—			53,614
Equity in earnings (loss) in affiliates	28,096			—		—			(28,096		)	—
Interest expense	47,730			3,345		499			—			51,574
Income (loss) before income taxes	(14,394		)	50,270		(5,740		)	(28,096		)	2,040
Income tax expense (benefit)	(14,594		)	18,263		(1,829		)	—			1,840
Net income (loss)	$	200		$	32,007	$	(3,911	)	$	(28,096	)	$	200
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	1,187			—		1,187			(1,187		)	1,187
Comprehensive income (loss)	$	1,387		$	32,007	$	(2,724	)	$	(29,283	)	$	1,387

CEC Entertainment, Inc.
Consolidating Statement of Comprehensive Income (Loss)
For the Nine Months Ended October 2, 2016
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues:
Food and beverage sales	$	280,391		$	36,779		$	4,421		$	—		$	321,591
Entertainment and merchandise sales	358,192			18,151			7,635			—			383,978
Total company venue sales	638,583			54,930			12,056			—			705,569
Franchise fees and royalties	1,561			11,879			—			—			13,440
International Association assessments and other fees	735			1,845			28,746			(31,326		)	—
Total revenues	640,879			68,654			40,802			(31,326		)	719,009
Operating Costs and Expenses:
Company venue operating costs:
Cost of food and beverage	69,431			9,632			1,639			—			80,702
Cost of entertainment and merchandise	23,149			1,329			526			—			25,004
Total cost of food, beverage, entertainment and merchandise	92,580			10,961			2,165			—			105,706
Labor expenses	175,495			11,842			3,833			—			191,170
Depreciation and amortization	81,661			1,884			1,484			—			85,029
Rent expense	66,601			4,043			1,674			—			72,318
Other venue operating expenses	104,297			7,568			2,884			(2,606		)	112,143
Total company venue operating costs	520,634			36,298			12,040			(2,606		)	566,366
Advertising expense	30,188			3,548			31,761			(28,720		)	36,777
General and administrative expenses	19,669			30,996			557			—			51,222
Transaction, severance and related litigation costs	1,294			55			—			—			1,349
Asset impairment	709			—			63			—			772
Total operating costs and expenses	572,494			70,897			44,421			(31,326		)	656,486
Operating income (loss)	68,385			(2,243		)	(3,619		)	—			62,523
Equity in earnings (loss) in affiliates	(8,096		)	—			—			8,096			—
Interest expense	47,765			3,328			326			—			51,419
Income (loss) before income taxes	12,524			(5,571		)	(3,945		)	8,096			11,104
Income tax expense (benefit)	6,065			(185		)	(1,235		)	—			4,645
Net income (loss)	$	6,459		$	(5,386	)	$	(2,710	)	$	8,096		$	6,459
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	703			—			703			(703		)	703
Comprehensive income (loss)	$	7,162		$	(5,386	)	$	(2,007	)	$	7,393		$	7,162

Condensed Consolidating Cash Flow Statement

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Nine Months Ended October 1, 2017
(in thousands)
	Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Cash flows provided by operating activities:	$	68,568		$	24,632		$	1,040		$	—	$	94,240
Cash flows from investing activities:
Purchases of property and equipment	(49,735		)	(21,407		)	(768		)	—		(71,910		)
Development of internal use software	—			(2,520		)	—			—		(2,520		)
Proceeds from sale of property and equipment	424			—			—			—		424
Cash flows provided by (used in) investing activities	(49,311		)	(23,927		)	(768		)	—		(74,006		)
Cash flows from financing activities:
Repayments on senior term loan	(5,700		)	—			—			—		(5,700		)
Repayments on note payable	—			(13		)	—			—		(13		)
Proceeds from sale-leaseback transaction	4,073			—			—			—		4,073
Payments on capital lease obligations	(335		)	—			(5		)	—		(340		)
Payments on sale leaseback transactions	(1,789		)	—			—			—		(1,789		)
Return of capital	1,447			—			—			—		1,447
Cash flows provided by (used in) financing activities	(2,304		)	(13		)	(5		)	—		(2,322		)
Effect of foreign exchange rate changes on cash	—			—			492			—		492
Change in cash and cash equivalents	16,953			692			759			—		18,404
Cash and cash equivalents at beginning of period	53,088			1,158			6,777			—		61,023
Cash and cash equivalents at end of period	$	70,041		$	1,850		$	7,536		$	—	$	79,427

CEC Entertainment, Inc.
Consolidating Statement of Cash Flows
For the Nine Months Ended October 2, 2016
(in thousands)
	Issuer				Guarantors				Non-Guarantors				Eliminations			Consolidated
Cash flows provided by (used in) operating activities:	$	93,340			$	17,674			$	240			$	—		$	111,254
Cash flows from investing activities:
Purchases of property and equipment	(50,823		)		(15,506		)		(206		)		—			(66,535		)
Development of internal use software	(6,004		)		(2,784		)		—				—			(8,788		)
Proceeds from the sale of property and equipment	426				—				—				—			426
Cash flows provided by (used in) investing activities	(56,401		)	—	(18,290		)	—	(206		)	—	—		—	(74,897		)
Cash flows from financing activities:
Repayments on senior term loan	(5,700		)		—				—				—			(5,700		)
Repayments on note payable	—				(37		)		—				—			(37		)
Payments on capital lease obligations	(308		)		—				(3		)		—			(311		)
Payments on sale leaseback transactions	(1,466		)		—				—				—			(1,466		)
Excess tax benefit realized from stock-based compensation	4				—				—				—			4
Cash flows provided by (used in) financing activities	(7,470		)	—	(37		)	—	(3		)	—	—		—	(7,510		)
Effect of foreign exchange rate changes on cash	—				—				356				—			356
Change in cash and cash equivalents	29,469			—	(653		)	—	387			—	—		—	29,203
Cash and cash equivalents at beginning of period	42,235				1,797				6,622				—			50,654
Cash and cash equivalents at end of period	$	71,704			$	1,144			$	7,009			$	—		$	79,857