Guarantor/Non-Guarantor Financial Information

3 Months Ended

Mar. 31, 2020

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Guarantor/Non-Guarantor Financial Information

16. Guarantor/Non-Guarantor Financial Information

VM Consolidated, Inc., a wholly-owned subsidiary of the Company, is the lead borrower of the First Lien Term Loan 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. Prior to the Business Combination, VM Consolidated, Inc. was known as ATS Consolidated, Inc. and its financial information was the same as the lead borrower. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly-owned subsidiary guarantors and non-guarantor subsidiaries.

The following financial information presents the Condensed Consolidated Balance Sheets as of March 31, 2020 and the related Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 for the Company, combined guarantor subsidiaries and combined non-guarantor subsidiaries.

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

at March 31, 2020

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		VM Consolidated Inc. (Guarantor Subsidiary)		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	96,623	$	16,960	$	—		$	113,583
Restricted cash		—		1,510		—		—			1,510
Accounts receivable (net of allowance for credit loss of $10.8 million )		—		105,799		4,040		—			109,839
Unbilled receivables		—		16,071		287		—			16,358
Investment in subsidiary		175,141		75,098		—		(250,239	)		—
Prepaid expenses and other current assets		—		22,116		2,500		—			24,616
Total current assets		175,141		317,217		23,787		(250,239	)		265,906
Installation and service parts, net		—		8,022		—		—			8,022
Property and equipment, net		—		70,588		3,043		—			73,631
Operating lease assets		—		31,387		402		—			31,789
Intangible assets, net		—		382,654		27,303		—			409,957
Goodwill		—		524,767		56,963		—			581,730
Due from affiliates		169,259				—		(169,259	)		—
Other non-current assets		—		3,080		14		—			3,094
Total assets	$	344,400	$	1,337,715	$	111,512	$	(419,498	)	$	1,374,129
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	26,071	$	13,127	$	—		$	39,198
Accrued liabilities		—		20,580		3,121		—			23,701
Current portion of long-term debt		—		9,104		—		—			9,104
Total current liabilities		—		55,755		16,248		—			72,003
Long-term debt, net of current portion and deferred financing costs		—		835,507		—		—			835,507
Operating lease liabilities, net of current portion		—		29,712		205		—			29,917
Payable to related party pursuant to tax receivable agreement		—		61,174		—		—			61,174
Due to affiliates		—		154,091		15,168		(169,259	)		—
Asset retirement obligation		—		6,387		—		—			6,387
Deferred tax liabilities, net		—		19,679		4,793		—			24,472
Other long-term liabilities		—		269		—		—			269
Total liabilities		—		1,162,574		36,414		(169,259	)		1,029,729
Total stockholders' equity		344,400		175,141		75,098		(250,239	)		344,400
Total liabilities and stockholders' equity	$	344,400	$	1,337,715	$	111,512	$	(419,498	)	$	1,374,129

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2020

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			VM Consolidated Inc. (Guarantor Subsidiary)			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	95,650		$	3,847		$	—		$	99,497
Product sales		—			17,216			—			—			17,216
Total revenue		—			112,866			3,847			—			116,713
Cost of service revenue		—			667			552			—			1,219
Cost of product sales		—			8,690			—			—			8,690
Operating expenses		—			30,578			1,681			—			32,259
Selling, general and administrative expenses		—			23,976			1,910			—			25,886
Depreciation, amortization and (gain) loss on disposal of assets, net		—			27,995			1,251			—			29,246
Total costs and expenses		—			91,906			5,394			—			97,300
Income (loss) from operations		—			20,960			(1,547	)		—			19,413
(Income) loss from equity investment		(6,673	)		1,307			—			5,366			—
Interest expense, net		—			12,462			(11	)		—			12,451
Other income, net		—			(2,887	)		(38	)		—			(2,925	)
Total other (income) expenses		(6,673	)		10,882			(49	)		5,366			9,526
Income before income tax provision (benefit)		6,673			10,078			(1,498	)		(5,366	)		9,887
Income tax provision (benefit)		—			3,405			(191	)		—			3,214
Net income (loss)	$	6,673		$	6,673		$	(1,307	)	$	(5,366	)	$	6,673
Other comprehensive loss:
Change in foreign currency translation adjustment		—			(3,367	)		—			—			(3,367	)
Total comprehensive income (loss)	$	6,673		$	3,306		$	(1,307	)	$	(5,366	)	$	3,306

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31, 2020

(Unaudited)

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			VM Consolidated Inc. (Guarantor Subsidiary)			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	6,673		$	6,673		$	(1,307	)	$	(5,366	)	$	6,673
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			27,999			1,251			—			29,250
Amortization of deferred financing costs and discounts		—			903			—			—			903
Credit loss expense		—			5,356			—			—			5,356
Deferred income taxes		—			(94	)		(588	)		—			(682	)
Stock-based compensation		—			2,768			—			—			2,768
Installation and service parts expense		—			393			—			—			393
Accretion expense		—			64			—			—			64
Gain on disposal of assets		—			(4	)		—			—			(4	)
(Income) loss from equity investment		(6,673	)		1,307			—			5,366			—
Changes in operating assets and liabilities:
Accounts receivable, net		—			(23,028	)		631			—			(22,397	)
Unbilled receivables		—			3,246			402			—			3,648
Prepaid expenses and other current assets		—			2,628			(261	)		—			2,367
Accounts payable and accrued liabilities		—			(10,444	)		(919	)		—			(11,363	)
Due to affiliates		—			(1,341	)		1,341			—			—
Other liabilities		—			(2,135	)		—			—			(2,135	)
Net cash provided by operating activities		—			14,291			550			—			14,841
Cash Flows from Investing Activities:
Purchases of installation and service parts and property and equipment		—			(7,370	)		(771	)		—			(8,141	)
Cash proceeds from the sale of assets		—			10			—			—			10
Net cash used in investing activities		—			(7,360	)		(771	)		—			(8,131	)
Cash Flows from Financing Activities:
Repayment of long-term debt		—			(21,951	)		—			—			(21,951	)
Payment of debt issuance costs		—			(806	)		—			—			(806	)
Payment of employee tax withholding related to RSU vesting		—			(327	)		—			—			(327	)
Net cash used in financing activities		—			(23,084	)		—			—			(23,084	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(963	)		—			(963	)
Net decrease in cash, cash equivalents and restricted cash		—			(16,153	)		(1,184	)		—			(17,337	)
Cash, cash equivalents and restricted cash - beginning of period		—			114,286			18,144			—			132,430
Cash, cash equivalents and restricted cash - end of period	$	—		$	98,133		$	16,960		$	—		$	115,093

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31, 2020

(Unaudited)

	Verra Mobility Corporation (Ultimate Parent)		VM Consolidated Inc. (Guarantor Subsidiary)		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	11,822	$	—	$	—	$	11,822
Income taxes paid, net		—		156		163		—		319
Supplemental non-cash investing and financing activities:
Earn-out shares issued to Platinum Stockholder		18,287		—		—		—		18,287
Additions to ARO, property and equipment, and other		—		22		—		—		22
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end		—		4,586		—		—		4,586