Investing in the Fun. A Capital Plan With a Capital “C”. C E C A / R 0 4 Page 2 The Company’s record of strong financial performance and a solid balance sheet afford us the  flexibility to selectively and aggressively reinvest in our own unique brand of fun. During 2004,  improved operating efficiencies and responsible fiscal management yielded operating cash  flow of $165.8 million which we used to further strengthen our balance sheet and evolve our  Chuck E. Cheese’s concept. While maintaining a low debt-to-equity ratio, we also repurchased  $113.9 million in outstanding shares of common stock. The stock buyback represents 8.2  percent of fully diluted shares outstanding. It also reflects our continued belief in the long-term  prospects of the company which has doubled in market capitalization from $763 million to  nearly $1.5 billion over the last five years — despite a less-than-robust economy. In 2004, we  also invested $80.1 million directly back into the business — opening 29 new restaurants,  acquiring 3 restaurants from franchisees and completing 120 remodels, expansions and game  rotations. This represents nearly one of every four of our restaurant-entertainment centers in  a 12-month period alone. The success of these remodels and new restaurants helped to drive  increased revenues and improved same-store sales, and formed the basis of an aggressive  capital plan that will take us through 2005 and beyond.  We are confident in our strategy to grow the concept through capital reinvestment. Our capital  expenditure plan for 2005 underscores that confidence. We are committing approximately  $30 million from operating cash flow to evolve Chuck E. Cheese’s through an accelerated  program of major remodels, interior and exterior refurbishments and game rotations. The pro- gram will impact 150 to 160 Chuck E. Cheese’s and doubles the 2004 capital expenditure for  existing restaurants. Exterior updates include signage with the new Chuck E. logo and facility  enhancements that are more colorful and inviting. Major remodels in which the gameroom is  expanded will typically receive updated signage, lighter and brighter decor and new games  and attractions. In addition, we plan to open 30 to 35 new restaurants in 2005. 