Guarantor/Non-Guarantor Financial Information

3 Months Ended

Mar. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Guarantor/Non-Guarantor Financial Information

15. Guarantor/Non-Guarantor Financial Information

VM Consolidated, Inc., a wholly owned subsidiary of the Company, is the lead borrower of the 2021 Term Loan, Senior Notes and the Revolver. VM Consolidated, Inc. is owned by the Company through a series of holding companies that ultimately end with the Company. VM Consolidated, Inc. is wholly owned by Greenlight Acquisition Corporation, which is wholly owned by Greenlight Intermediate Holding Corporation, which is wholly owned by Greenlight Holding Corporation, which is wholly owned by Verra Mobility Holdings, LLC, which is wholly owned by Verra Mobility Corporation or the Company. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly owned guarantor subsidiaries and non-guarantor subsidiaries.

The following financial information presents the condensed consolidated balance sheets as of March 31, 2022 and the related condensed consolidated statements of operations and comprehensive income and condensed consolidated statement of cash flows for the three months ended March 31, 2022 for the Company, the combined guarantor subsidiaries and the combined non-guarantor subsidiaries.

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

at March 31, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	60,209	$	33,168	$	—		$	93,377
Restricted cash		—		3,915		101		—			4,016
Accounts receivable (net of allowance for credit loss of $14.3 million )		—		158,861		13,045		—			171,906
Unbilled receivables		—		35,524		3,960		—			39,484
Investment in subsidiary		106,556		156,179		—		(262,735	)		—
Inventory, net		—		1,124		14,327		—			15,451
Prepaid expenses and other current assets		—		28,386		10,359		—			38,745
Total current assets		106,556		444,198		74,960		(262,735	)		362,979
Installation and service parts, net		—		15,491		—		—			15,491
Property and equipment, net		—		82,450		16,901		—			99,351
Operating lease assets		—		32,075		7,869		—			39,944
Intangible assets, net		—		344,457		115,626		—			460,083
Goodwill		—		689,501		148,409		—			837,910
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		4,566		4,161		—			8,727
Total assets	$	275,815	$	1,612,738	$	367,926	$	(431,994	)	$	1,824,485
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	47,124	$	15,925	$	—		$	63,049
Deferred revenue		—		15,699		11,670		—			27,369
Accrued liabilities		—		35,592		11,076		—			46,668
Payable to related party pursuant to tax receivable agreement, current portion		—		5,107		—		—			5,107
Current portion of long-term debt		—		11,952		—		—			11,952
Total current liabilities		—		115,474		38,671		—			154,145
Long-term debt, net of current portion		—		1,206,276		—		—			1,206,276
Operating lease liabilities, net of current portion		—		29,961		5,889		—			35,850
Payable to related party pursuant to tax receivable agreement, net of current portion		—		56,615		—		—			56,615
Private placement warrant liabilities		—		42,200		—		—			42,200
Due to affiliates		—		27,173		142,086		(169,259	)		—
Asset retirement obligation		—		12,006		26		—			12,032
Deferred tax liabilities, net		—		3,222		25,064		—			28,286
Other long-term liabilities		—		13,255		11		—			13,266
Total liabilities		—		1,506,182		211,747		(169,259	)		1,548,670
Total stockholders' equity		275,815		106,556		156,179		(262,735	)		275,815
Total liabilities and stockholders' equity	$	275,815	$	1,612,738	$	367,926	$	(431,994	)	$	1,824,485

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

Three Months Ended March 31, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	143,164		$	17,970		$	—		$	161,134
Product sales		—			4,875			4,376			—			9,251
Total revenue		—			148,039			22,346			—			170,385
Cost of service revenue		—			2,475			1,304			—			3,779
Cost of product sales		—			2,825			3,170			—			5,995
Operating expenses		—			41,965			9,098			—			51,063
Selling, general and administrative expenses		—			35,603			6,032			—			41,635
Depreciation, amortization and (gain) loss on disposal of assets, net		—			30,739			5,168			—			35,907
Total costs and expenses		—			113,607			24,772			—			138,379
Income (loss) from operations		—			34,432			(2,426	)		—			32,006
Income from equity investment		(10,040	)		1,312			—			8,728			—
Interest expense, net		—			14,279			—			—			14,279
Change in fair value of private placement warrants		—			3,734			—			—			3,734
Other income, net		—			(2,688	)		(178	)		—			(2,866	)
Total other (income) expenses		(10,040	)		16,637			(178	)		8,728			15,147
Income (loss) before income taxes		10,040			17,795			(2,248	)		(8,728	)		16,859
Income tax provision (benefit)		—			7,755			(936	)		—			6,819
Net income (loss)	$	10,040		$	10,040		$	(1,312	)	$	(8,728	)	$	10,040
Other comprehensive income:
Change in foreign currency translation adjustment		—			—			2,708			—			2,708
Total comprehensive income	$	10,040		$	10,040		$	1,396		$	(8,728	)	$	12,748

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	10,040		$	10,040		$	(1,312	)	$	(8,728	)	$	10,040
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			30,507			5,168			—			35,675
Amortization of deferred financing costs and discounts		—			1,306			—			—			1,306
Change in fair value of private placement warrants		—			3,734			—			—			3,734
Credit loss expense		—			3,372			133			—			3,505
Deferred income taxes		—			(19,247	)		476			—			(18,771	)
Stock-based compensation		—			4,446			—			—			4,446
Other		—			354			—			—			354
Income from equity investment		(10,040	)		1,312			—			8,728			—
Changes in operating assets and liabilities:
Accounts receivable, net		—			(12,054	)		(2,246	)		—			(14,300	)
Unbilled receivables		—			(11,305	)		1,040			—			(10,265	)
Inventory, net		—			(2,559	)		(3,163	)		—			(5,722	)
Prepaid expenses and other assets		—			9,173			(938	)		—			8,235
Deferred revenue		—			(1,470	)		1,516			—			46
Accounts payable and other current liabilities		—			2,670			(3,147	)		—			(477	)
Due to affiliates		—			(1,148	)		1,148			—			—
Other liabilities		—			13,329			112			—			13,441
Net cash provided by (used in) operating activities		—			32,460			(1,213	)		—			31,247
Cash Flows from Investing Activities:
Payment of contingent consideration		—			(412	)		—			—			(412	)
Purchases of installation and service parts and property and equipment		—			(8,286	)		(3,192	)		—			(11,478	)
Cash proceeds from the sale of assets		—			25			—			—			25
Net cash used in investing activities		—			(8,673	)		(3,192	)		—			(11,865	)
Cash Flows from Financing Activities:
Repayment on the revolver		—			(25,000	)		—			—			(25,000	)
Repayment of long-term debt		—			(2,255	)		—			—			(2,255	)
Payment of debt issuance costs		—			(54	)		—			—			(54	)
Proceeds from the exercise of stock options		—			93			—			—			93
Payment of employee tax withholding related to RSUs vesting		—			(1,436	)		—			—			(1,436	)
Net cash used in financing activities		—			(28,652	)		—			—			(28,652	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2,231			—			2,231
Net decrease in cash, cash equivalents and restricted cash		—			(4,865	)		(2,174	)		—			(7,039	)
Cash, cash equivalents and restricted cash - beginning of period		—			68,989			35,443			—			104,432
Cash, cash equivalents and restricted cash - end of period	$	—		$	64,124		$	33,269		$	—		$	97,393

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31, 2022

(Unaudited)

	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	8,188	$	—	$	—	$	8,188
Income taxes paid, net of refunds		—		1,124		23		—		1,147
Supplemental non-cash investing and financing activities:
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end		—		4,057		—		—		4,057