Guarantor/Non-Guarantor Financial Information

6 Months Ended

Jun. 30, 2022

Condensed Financial Information Disclosure [Abstract]

Guarantor/Non-Guarantor Financial Information

16. Guarantor/Non-Guarantor Financial Information

VM Consolidated is the lead borrower of the 2021 Term Loan, Senior Notes and the Revolver. VM Consolidated is owned by the Company through a series of holding companies that ultimately end with the Company. VM Consolidated 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. 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 June 30, 2022 and the related condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2022 and the condensed consolidated statement of cash flows for the six months ended June 30, 2022 for the Company, the combined guarantor subsidiaries and the combined non-guarantor subsidiaries.

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

at June 30, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	54,934	$	31,458	$	—		$	86,392
Restricted cash		—		4,130		39		—			4,169
Accounts receivable (net of allowance for credit losses of $17.1 million)		—		162,855		9,961		—			172,816
Unbilled receivables		—		29,222		4,608		—			33,830
Investment in subsidiary		74,964		141,993		—		(216,957	)		—
Inventory, net		—		1,531		15,018		—			16,549
Prepaid expenses and other current assets		—		26,154		8,461		—			34,615
Total current assets		74,964		420,819		69,545		(216,957	)		348,371
Installation and service parts, net		—		15,381		—		—			15,381
Property and equipment, net		—		85,405		17,350		—			102,755
Operating lease assets		—		30,854		7,292		—			38,146
Intangible assets, net		—		321,251		108,562		—			429,813
Goodwill		—		689,501		143,310		—			832,811
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		8,306		4,277		—			12,583
Total assets	$	244,223	$	1,571,517	$	350,336	$	(386,216	)	$	1,779,860
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	54,932	$	14,175	$	—		$	69,107
Deferred revenue		—		18,624		11,119		—			29,743
Accrued liabilities		—		38,210		11,386		—			49,596
Tax receivable agreement liability, current portion		—		5,107		—		—			5,107
Current portion of long-term debt		—		11,952		—		—			11,952
Total current liabilities		—		128,825		36,680		—			165,505
Long-term debt, net of current portion		—		1,205,169		—		—			1,205,169
Operating lease liabilities, net of current portion		—		28,933		5,414		—			34,347
Tax receivable agreement liability, net of current portion		—		55,650		—		—			55,650
Private placement warrant liabilities		—		35,600		—		—			35,600
Due to affiliates		—		24,982		144,277		(169,259	)		—
Asset retirement obligation		—		12,020		25		—			12,045
Deferred tax liabilities, net		—		—		21,829		—			21,829
Other long-term liabilities		—		5,374		118		—			5,492
Total liabilities		—		1,496,553		208,343		(169,259	)		1,535,637
Total stockholders' equity		244,223		74,964		141,993		(216,957	)		244,223
Total liabilities and stockholders' equity	$	244,223	$	1,571,517	$	350,336	$	(386,216	)	$	1,779,860

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

Three Months Ended June 30, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	157,137		$	17,365		$	—		$	174,502
Product sales		—			8,466			4,519			—			12,985
Sales to affiliates		—			(348	)		348			—			—
Total revenue		—			165,255			22,232			—			187,487
Cost of service revenue		—			2,499			1,214			—			3,713
Cost of product sales		—			5,290			3,036			—			8,326
Cost of sales to affiliates		—			(3	)		3			—			—
Operating expenses		—			45,283			9,913			—			55,196
Selling, general and administrative expenses		—			32,465			7,687			—			40,152
Depreciation, amortization and (gain) loss on disposal of assets, net		—			29,875			5,064			—			34,939
Total costs and expenses		—			115,409			26,917			—			142,326
Income (loss) from operations		—			49,846			(4,685	)		—			45,161
Income from equity investment		(29,641	)		3,942			—			25,699			—
Interest expense, net		—			14,482			3			—			14,485
Change in fair value of private placement warrants		—			(6,600	)		—			—			(6,600	)
Tax receivable agreement liability adjustment		—			(965	)		—			—			(965	)
Other income, net		—			(3,186	)		(853	)		—			(4,039	)
Total other (income) expenses		(29,641	)		7,673			(850	)		25,699			2,881
Income (loss) before income taxes		29,641			42,173			(3,835	)		(25,699	)		42,280
Income tax provision		—			12,532			107			—			12,639
Net income (loss)	$	29,641		$	29,641		$	(3,942	)	$	(25,699	)	$	29,641
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(10,381	)		—			(10,381	)
Total comprehensive income (loss)	$	29,641		$	29,641		$	(14,323	)	$	(25,699	)	$	19,260

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

Six Months Ended June 30, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	300,301		$	35,335		$	—		$	335,636
Product sales		—			13,341			8,895			—			22,236
Sales to affiliates		—			(348	)		348			—			—
Total revenue		—			313,294			44,578			—			357,872
Cost of service revenue		—			4,974			2,518			—			7,492
Cost of product sales		—			8,115			6,206			—			14,321
Cost of sales to affiliates		—			(3	)		3			—			—
Operating expenses		—			87,248			19,011			—			106,259
Selling, general and administrative expenses		—			68,068			13,719			—			81,787
Depreciation, amortization and (gain) loss on disposal of assets, net		—			60,614			10,232			—			70,846
Total costs and expenses		—			229,016			51,689			—			280,705
Income (loss) from operations		—			84,278			(7,111	)		—			77,167
Income from equity investment		(39,681	)		5,254			—			34,427			—
Interest expense, net		—			28,761			3			—			28,764
Change in fair value of private placement warrants		—			(2,866	)		—			—			(2,866	)
Tax receivable agreement liability adjustment		—			(965	)		—			—			(965	)
Other income, net		—			(5,874	)		(1,031	)		—			(6,905	)
Total other (income) expenses		(39,681	)		24,310			(1,028	)		34,427			18,028
Income (loss) before income taxes		39,681			59,968			(6,083	)		(34,427	)		59,139
Income tax provision (benefit)		—			20,287			(829	)		—			19,458
Net income (loss)	$	39,681		$	39,681		$	(5,254	)	$	(34,427	)	$	39,681
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(7,673	)		—			(7,673	)
Total comprehensive income (loss)	$	39,681		$	39,681		$	(12,927	)	$	(34,427	)	$	32,008

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2022

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	39,681		$	39,681		$	(5,254	)	$	(34,427	)	$	39,681
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			59,983			10,232			—			70,215
Amortization of deferred financing costs and discounts		—			2,693			—			—			2,693
Change in fair value of private placement warrants		—			(2,866	)		—			—			(2,866	)
Tax receivable agreement liability adjustment		—			(965	)		—			—			(965	)
Credit loss expense		—			6,769			267			—			7,036
Deferred income taxes		—			(14,483	)		(1,217	)		—			(15,700	)
Stock-based compensation		—			9,012			—			—			9,012
Other		—			760			—			—			760
Income from equity investment		(39,681	)		5,254			—			34,427			—
Changes in operating assets and liabilities:
Accounts receivable, net		—			(19,443	)		331			—			(19,112	)
Unbilled receivables		—			(5,003	)		85			—			(4,918	)
Inventory, net		—			(2,918	)		(4,479	)		—			(7,397	)
Prepaid expenses and other assets		—			8,785			146			—			8,931
Deferred revenue		—			1,454			1,463			—			2,917
Accounts payable and other current liabilities		—			4,788			(3,077	)		—			1,711
Due to affiliates		—			(3,497	)		3,497			—			—
Other liabilities		—			4,342			35			—			4,377
Net cash provided by operating activities		—			94,346			2,029			—			96,375
Cash Flows from Investing Activities:
Payment of contingent consideration		—			(647	)		—			—			(647	)
Purchases of installation and service parts and property and equipment		—			(17,179	)		(5,545	)		—			(22,724	)
Cash proceeds from the sale of assets		—			72			—			—			72
Net cash used in investing activities		—			(17,754	)		(5,545	)		—			(23,299	)
Cash Flows from Financing Activities:
Repayment on the revolver		—			(25,000	)		—			—			(25,000	)
Repayment of long-term debt		—			(4,510	)		—			—			(4,510	)
Payment of debt issuance costs		—			(246	)		—			—			(246	)
Share repurchases and retirement		—			(55,281	)		—			—			(55,281	)
Proceeds from exercise of stock options		—			159			—			—			159
Payment of employee tax withholding related to RSUs vesting		—			(1,639	)		—			—			(1,639	)
Net cash used in financing activities		—			(86,517	)		—			—			(86,517	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(430	)		—			(430	)
Net decrease in cash, cash equivalents and restricted cash		—			(9,925	)		(3,946	)		—			(13,871	)
Cash, cash equivalents and restricted cash - beginning of period		—			68,989			35,443			—			104,432
Cash, cash equivalents and restricted cash - end of period	$	—		$	59,064		$	31,497		$	—		$	90,561

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

Six Months Ended June 30, 2022

(Unaudited)

	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	26,036	$	—	$	—	$	26,036
Income taxes paid, net of refunds		—		25,764		263		—		26,027
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		—		4,617		—		—		4,617