Guarantor/Non-Guarantor Financial Information

6 Months Ended

Jun. 30, 2020

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Guarantor/Non-Guarantor Financial Information

17.	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. 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 June 30, 2020 and the related condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and condensed consolidated statements of cash flows for the six months ended June 30, 2020 for the Company, combined guarantor subsidiaries and combined non-guarantor subsidiaries.

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

at June 30, 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	$	—	$	98,566	$	14,673	$	—		$	113,239
Restricted cash		—		711		—		—			711
Accounts receivable (net of allowance for credit loss of $12.9 million )		—		122,373		2,879		—			125,252
Unbilled receivables		—		12,244		288		—			12,532
Investment in subsidiary		162,491		73,069		—		(235,560	)		—
Prepaid expenses and other current assets		—		16,655		2,309		—			18,964
Total current assets		162,491		323,618		20,149		(235,560	)		270,698
Installation and service parts, net		—		8,672		—		—			8,672
Property and equipment, net		—		69,987		3,617		—			73,604
Operating lease assets		—		30,588		345		—			30,933
Intangible assets, net		—		360,280		26,083		—			386,363
Goodwill		—		524,766		56,849		—			581,615
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		3,223		14		—			3,237
Total assets	$	331,750	$	1,321,134	$	107,057	$	(404,819	)	$	1,355,122
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	26,229	$	10,117	$	—		$	36,346
Accrued liabilities		—		16,546		3,024		—			19,570
Current portion of long-term debt		—		9,104		—		—			9,104
Total current liabilities		—		51,879		13,141		—			65,020
Long-term debt, net of current portion and deferred financing costs		—		834,317		—		—			834,317
Operating lease liabilities, net of current portion		—		29,070		170		—			29,240
Payable to related party pursuant to tax receivable agreement		—		65,620		—		—			65,620
Due to affiliates		—		153,369		15,890		(169,259	)		—
Asset retirement obligation		—		6,237		—		—			6,237
Deferred tax liabilities, net		—		17,904		4,787		—			22,691
Other long-term liabilities		—		247		—		—			247
Total liabilities		—		1,158,643		33,988		(169,259	)		1,023,372
Total stockholders' equity		331,750		162,491		73,069		(235,560	)		331,750
Total liabilities and stockholders' equity	$	331,750	$	1,321,134	$	107,057	$	(404,819	)	$	1,355,122

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended June 30, 2020

(Unaudited)


($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			VM Consolidated Inc. (Guarantor Subsidiary)			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	59,784		$	3,031		$	—		$	62,815
Product sales		—			16,994			—			—			16,994
Total revenue		—			76,778			3,031			—			79,809
Cost of service revenue		—			451			562			—			1,013
Cost of product sales		—			9,060			—			—			9,060
Operating expenses		—			24,926			1,773			—			26,699
Selling, general and administrative expenses		—			19,649			1,172			—			20,821
Depreciation, amortization and (gain) loss on disposal of assets, net		—			27,876			1,290			—			29,166
Total costs and expenses		—			81,962			4,797			—			86,759
Loss from operations		—			(5,184	)		(1,766	)		—			(6,950	)
Loss from equity investment		15,388			1,521			—			(16,909	)		—
Interest expense, net		—			9,540			(1	)		—			9,539
Loss from tax receivable agreement adjustment		—			4,446			—			—			4,446
Other income, net		—			(1,494	)		(29	)		—			(1,523	)
Total other expenses (income)		15,388			14,013			(30	)		(16,909	)		12,462
Loss before income tax benefit		(15,388	)		(19,197	)		(1,736	)		16,909			(19,412	)
Income tax benefit		—			(3,809	)		(215	)		—			(4,024	)
Net loss	$	(15,388	)	$	(15,388	)	$	(1,521	)	$	16,909		$	(15,388	)
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(508	)		—			(508	)
Total comprehensive loss	$	(15,388	)	$	(15,388	)	$	(2,029	)	$	16,909		$	(15,896	)

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

Six Months Ended June 30, 2020

(Unaudited)


($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			VM Consolidated Inc. (Guarantor Subsidiary)			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	155,434		$	6,878		$	—		$	162,312
Product sales		—			34,210			—			—			34,210
Total revenue		—			189,644			6,878			—			196,522
Cost of service revenue		—			1,119			1,113			—			2,232
Cost of product sales		—			17,750			—			—			17,750
Operating expenses		—			55,504			3,454			—			58,958
Selling, general and administrative expenses		—			43,624			3,083			—			46,707
Depreciation, amortization and (gain) loss on disposal of assets, net		—			55,871			2,541			—			58,412
Total costs and expenses		—			173,868			10,191			—			184,059
Income (loss) from operations		—			15,776			(3,313	)		—			12,463
Loss from equity investment		8,715			2,828			—			(11,543	)		—
Interest expense, net		—			22,002			(12	)		—			21,990
Loss from tax receivable agreement adjustment		—			4,446			—			—			4,446
Other income, net		—			(4,381	)		(67	)		—			(4,448	)
Total other expenses (income)		8,715			24,895			(79	)		(11,543	)		21,988
Loss before income tax benefit		(8,715	)		(9,119	)		(3,234	)		11,543			(9,525	)
Income tax benefit		—			(404	)		(406	)		—			(810	)
Net loss	$	(8,715	)	$	(8,715	)	$	(2,828	)	$	11,543		$	(8,715	)
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(3,875	)		—			(3,875	)
Total comprehensive loss	$	(8,715	)	$	(8,715	)	$	(6,703	)	$	11,543		$	(12,590	)

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 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 loss	$	(8,715	)	$	(8,715	)	$	(2,828	)	$	11,543		$	(8,715	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		—			55,873			2,536			—			58,409
Amortization of deferred financing costs and discounts		—			2,106			—			—			2,106
Loss from tax receivable agreement adjustment		—			4,446			—			—			4,446
Credit loss expense		—			10,723			—			—			10,723
Deferred income taxes		—			(1,869	)		(627	)		—			(2,496	)
Stock-based compensation		—			6,039			—			—			6,039
Installation and service parts expense		—			559			—			—			559
Accretion expense		—			129			—			—			129
(Gain) loss on disposal of assets		—			(2	)		5			—			3
Loss from equity investment		8,715			2,828			—			(11,543	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		—			(44,969	)		1,786			—			(43,183	)
Unbilled receivables		—			7,073			403			—			7,476
Prepaid expenses and other current assets		—			8,008			(29	)		—			7,979
Accounts payable and accrued liabilities		—			(13,865	)		(3,998	)		—			(17,863	)
Due to affiliates		—			(2,027	)		2,027			—			—
Other liabilities		—			(3,069	)		—			—			(3,069	)
Net cash provided by (used in) operating activities		—			23,268			(725	)		—			22,543
Cash Flows from Investing Activities:
Purchases of installation and service parts and property and equipment		—			(12,825	)		(1,476	)		—			(14,301	)
Cash proceeds from the sale of assets		—			49			—			—			49
Net cash used in investing activities		—			(12,776	)		(1,476	)		—			(14,252	)
Cash Flows from Financing Activities:
Repayment of long-term debt		—			(24,227	)		—			—			(24,227	)
Payment of debt issuance costs		—			(922	)		—			—			(922	)
Payment of employee tax withholding related to RSU vesting		—			(352	)		—			—			(352	)
Net cash used in financing activities		—			(25,501	)		—			—			(25,501	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,270	)		—			(1,270	)
Net decrease in cash, cash equivalents and restricted cash		—			(15,009	)		(3,471	)		—			(18,480	)
Cash, cash equivalents and restricted cash - beginning of period		—			114,286			18,144			—			132,430
Cash, cash equivalents and restricted cash - end of period	$	—		$	99,277		$	14,673		$	—		$	113,950

Verra Mobility Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

Six Months Ended June 30, 2020

(Unaudited)

	Verra Mobility Corporation (Ultimate Parent)		VM Consolidated Inc. (Guarantor Subsidiary)		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	20,201	$	—	$	—	$	20,201
Income taxes paid, net		—		826		309		—		1,135
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		—		41		—		—		41
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end		—		3,238		—		—		3,238