16 unchanged sentences
however, the curtailment of work under these projects and the CARES Act benefits are not likely to have a material impact on our financial condition or results of operations.
+Added: The reimbursement period for Section 3610 of the CARES Act was extended until March 31, 2021.
The Company has provided additional disclosure around liquidity and capital resources which can be found in the “Liquidity and Capital Resources” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q.
4 unchanged sentences
Engineered solutions for complex physical and digital infrastructure challenges SEGMENTS KEY FACTS AND FIGURES Technology-driven solutions for defense and intelligence customers FINANCIAL SNAPSHOT $4B Total Revenue Trailing 12-Months (Q2 2020) $4B Contract Awards Trailing 12-Months (Q2 2020) 75+ Years Of History Federal Solutions 49% Critical Infrastructure 51% Federal Solutions 58% Critical Infrastructure 42% Federal Solutions Critical Infrastructure ~16K Employees 6% Revenue Growth Trailing 12-Months (Q2 2020) 1.0X Book-To-Bill Ratio Trailing 12-Months (Q2 2020) $7.7B Backlog As Of 6/30/2020 PARSONS CORPORATION.
−Removed: We are a leading disruptive technology provider in the global defense, intelligence and critical infrastructure markets.
+Added: We are a leading innovative technology provider in the global defense, intelligence and critical infrastructure markets.
We provide software and hardware products, technical services and integrated solutions to support our customers’ missions.
10 unchanged sentences
The following table sets forth selected key metrics (in thousands, except Book-to-Bill):
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Awards (year to date)
Book-to-Bill (year to date)
−Removed: Difference between our backlog of $7.8 billion and our remaining unsatisfied performance obligations, or RUPO, of $5.0 billion, each as of September 30, 2020, is due to (i) unissued delivery orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
+Added: Difference between our backlog of $8.2 billion and our remaining unsatisfied performance obligations, or RUPO, of $5.1 billion, each as of March 31, 2021, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Awards generally represent the amount of revenue expected to be earned in the future from funded and unfunded contract awards received during the period.
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Federal Solutions
2 unchanged sentences
The volume of contract awards can fluctuate in any given period due to win rate and the timing and size of the awards issued by our customers.
−Removed: The change in new awards in our Federal Solutions segment for the nine months ended September 30, 2020 when compared to the corresponding period last year was impacted by two significant contracts awarded in the first quarter of 2019.
−Removed: The awards in Critical Infrastructure for the three and nine months ended September 30, 2020 were impacted by several large contracts awarded in the third quarter of 2020.
+Added: The change in new awards in our Federal Solutions segment for the three months ended March 31, 2021 when compared to the corresponding period last year was impacted by one large contract awarded in the first quarter of 2020.
+Added: The awards in Critical Infrastructure for the three months ended March 31, 2021 were impacted by several large contracts awarded in the first quarter of 2021.
We define backlog to include the following two components:
4 unchanged sentences
(in thousands):
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Federal Solutions:
3 unchanged sentences
Total Backlog (2)
−Removed: As presented in the first quarter of 2019, funded backlog for the Critical Infrastructure segment was overstated by $38.3 million with a corresponding understatement in unfunded backlog.
−Removed: There was no impact on total Critical Infrastructure backlog or total backlog for Parsons Corporation.
−Removed: Difference between our backlog of $7.8 billion and our RUPO of $5.0 billion, each as of September 30, 2020, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
+Added: As presented in the first quarter of 2020, funded backlog for the Federal Solutions segment was overstated by $320.4 million with a corresponding understatement in unfunded backlog.
+Added: There was no impact on total Federal Solutions backlog or total backlog for Parsons Corporation.
+Added: Difference between our backlog of $8.2 billion and our RUPO of $5.1 billion , each as of March 31, 2021 , is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Our backlog includes orders under contracts that in some cases extend for several years.
5 unchanged sentences
Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.
−Removed: We expect to recognize $2.6 billion of our funded backlog at September 30, 2020 as revenues in the following twelve months.
+Added: We expect to recognize $2.7 billion of our funded backlog at March 31, 2021 as revenues in the following twelve months.
However, our U.S.
9 unchanged sentences
Three months ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Federal Solutions
6 unchanged sentences
Cost-cutting and efficiency initiatives, current and future budget restrictions, spending cuts and other efforts to reduce government spending could cause our government customers to reduce or delay funding or invest appropriated funds on a less consistent basis or not at all, and demand for our solutions or services could diminish.
−Removed: Furthermore, any disruption in the functioning of government
−Removed: agencies, including as a result of government closures and shutdowns, could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to customer locations or facilities as a result of such disruptions.
+Added: Furthermore, any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to customer locations or facilities as a result of such disruptions.
Federal Budget Uncertainty
19 unchanged sentences
Acquired Operations
−Removed: QRC Technologies
−Removed: On July 31, 2019, the Company acquired QRC Technologies for $214.1 million.
−Removed: QRC Technologies provides design and development of open-architecture radio-frequency products.
−Removed: The acquisition was funded by cash on-hand and borrowings under our Revolving Credit Facility.
−Removed: The financial results of QRC Technologies have been included in our consolidated results of operations from July 31, 2019 onward.
−Removed: Our results may be affected by variances as a result of seasonality we experience across our businesses.
−Removed: This pattern is typically driven by the U.S.
+Added: Braxton Science & Technology Group, LLC
+Added: On November 19, 2020, we acquired Braxton for $308.8 million.
+Added: Braxton operates at the forefront of satellite operations, ground system automation, flight dynamics, and spacecraft and antenna simulation for the U.S.
+Added: Department of Defense and Intelligence Community.
+Added: The acquisition was funded by cash on-hand.
+Added: The financial results of Braxton have been included in our consolidated results of operations from November 19, 2020 onward.
+Added: Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses.
+Added: The latter issue is typically driven by the U.S.
federal government fiscal year-end, September 30.
While not certain, it is not uncommon for U.S.
−Removed: government agencies to award extra tasks or complete other contract actions in the weeks before the end of the U.S.
−Removed: federal government fiscal year in order to avoid the loss of unexpended fiscal year funds.
+Added: government agencies to award task orders or complete other contract actions in the weeks before the end of the U.S.
+Added: federal government fiscal year in order to avoid the loss of unexpended U.S.
+Added: federal government fiscal year funds.
In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S.
5 unchanged sentences
We may continue to experience this seasonality in future periods, and our results of operations may be affected by it.
−Removed: Historically, the Company had elected to be taxed under the provisions of Subchapter “S” of the Internal Revenue Code for federal tax purposes.
−Removed: As a result, the Company’s income had not been subject to U.S.
−Removed: federal income taxes or state income taxes in those states where the “S” Corporation status was recognized.
−Removed: No provision or liability for federal or state income tax had been provided in the Company’s consolidated financial statements, prior to the IPO on May 8, 2019, except for those states where the “S” Corporation status was not recognized or where states imposed a tax on “S” Corporations.
−Removed: The provision for income tax in the historical periods prior to the IPO consists of these state taxes and from certain foreign jurisdictions where the Company is subject to tax.
−Removed: In connection with the IPO, the Company’s “S” Corporation status terminated, and the Company is now treated as a “C” Corporation under Subchapter C of the Internal Revenue Code.
−Removed: The revocation of the Company’s “S” Corporation election had a material impact on the Company’s results of operations, financial condition and cash flows.
−Removed: The effective tax rate has increased, and net income has decreased as compared to the Company’s “S” Corporation tax years, since the Company is now subject to both U.S.
−Removed: federal and state corporate income taxes on its earnings.
Results of Operations
12 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Time-and-materials
7 unchanged sentences
Under fixed-price contracts, we are required to deliver the objectives under the contract for a pre-determined price.
−Removed: Compared to time-and-materials and cost-plus contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any
−Removed: cost savings, but they also generally involve greater financial risk because we bear the risk of any cost overruns.
+Added: Compared to time-and-materials and cost-plus contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any cost savings, but they also generally involve greater financial risk because we bear the risk of any cost overruns.
In the aggregate, the contract type mix in our revenue for any given period will affect that period’s profitability.
Over time, we have experienced a relatively stable contract mix.
−Removed: Our recognition of profit on long-term contracts requires the use of assumptions related to transaction price and total cost of completion.
+Added: Our recognition of revenue on long-term contracts requires the use of assumptions related to transaction price and total cost of completion.
Estimates are continually evaluated as work progresses and are revised when necessary.
4 unchanged sentences
For the joint ventures we do not control, we recognize equity in earnings (loss) of unconsolidated joint ventures.
−Removed: Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended September 30, 2020 and September 30, 2019 of $42.0 million and $28.8 million, respectively, and for the nine months ended September 30, 2020 and September 30, 2019 of $124.7 million and $113.1 million, respectively.
+Added: Our revenues included amounts related to services we provided
+Added: to our unconsolidated joint ventures for the three m onths ended March 31, 2021 and March 31, 2020 of $42.0 million and $ 40 .
+Added: 4 million, respectively .
Operating costs and expenses
−Removed: Operating costs and expenses primarily include direct costs of contracts and indirect, general and administrative expenses.
+Added: Operating costs and expenses primarily include direct costs of contracts and selling, general and administrative expenses.
Costs associated with compensation-related expenses for our people and facilities, which includes ESOP contribution expenses, are the most significant component of our operating expenses.
−Removed: Total ESOP contribution expense for the three months ended September 30, 2020 and September 30, 2019 was $12.5 million and $12.3 million, respectively, and for the nine months ended September 30, 2020 and September 30, 2019 was $42.0 million and $36.8 million, respectively, and is recorded in “Direct cost of contracts” and “Indirect, general and administrative expenses.” We expect operating expenses to increase due to our anticipated growth and the incremental costs associated with being a public company.
+Added: Total ESOP contribution expense for the three months ended March 31, 2021 and March 31, 2020 was $13.2 million and $14.9 million, respectively, and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.”
Direct costs of contracts consist of direct labor and associated fringe benefits, indirect overhead, subcontractor and materials (“pass-through costs”), travel expenses and other expenses incurred to perform on contracts.
−Removed: Indirect, general and administrative expenses (“IG&A”) include salaries and wages and fringe benefits of our employees not performing work directly for customers, facility costs and other costs related to these indirect functions.
+Added: Selling, general and administrative expenses (“SG&A”) include salaries and wages and fringe benefits of our employees not performing work directly for customers, facility costs and other costs related to these indirect functions.
Other income and expenses
−Removed: Other income and expenses primarily consist of interest income, interest expense, other income, net and interest and other expense associated with claims on long-term contracts.
+Added: Other income and expenses primarily consist of interest income, interest expense and other income, net.
Interest income primarily consists of interest earned on U.S.
3 unchanged sentences
Adjusted EBITDA
−Removed: The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2020 and September 30, 2019.
+Added: The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three months ended March 31, 2021 and March 31, 2020.
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Adjusted EBITDA (1)
5 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Net income attributable to Parsons Corporation
Interest expense, net
−Removed: Income tax expense (benefit)
+Added: Income tax expense
Depreciation and amortization
4 unchanged sentences
Adjusted EBITDA
−Removed: Reflects costs incurred in connection with acquisitions, IPO, and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
+Added: Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
Reflects costs associated with our corporate restructuring initiatives.
5 unchanged sentences
We define Adjusted EBITDA as net income (loss) attributable to Parsons Corporation, adjusted to include net income (loss) attributable to noncontrolling interests and to exclude interest expense (net of interest income), provision for income taxes, depreciation and amortization and certain other items that we do not consider in our evaluation of ongoing operating performance.
−Removed: These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, amortization of deferred gain resulting from sale-leaseback transactions, expenses incurred in connection with acquisitions and other non-recurring transaction costs and expenses related to our corporate restructuring initiatives.
+Added: These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs and expenses related to our corporate restructuring initiatives.
Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Federal Solutions Adjusted EBITDA attributable to Parsons Corporation
2 unchanged sentences
Total Adjusted EBITDA
−Removed: The following table sets forth our results of operations for the three and nine months ended September 30, 2020 and September 30, 2019 as a percentage of revenue.
+Added: The following table sets forth our results of operations for the three months ended March 31, 2021 and March 31, 2020 as a percentage of revenue.
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Direct costs of contracts
Equity in earnings of unconsolidated joint ventures
−Removed: Indirect, general and administrative expenses
+Added: Selling, general and administrative expenses
Operating income (loss)
10 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: Revenue decreased $19.0 million for the three months ended September 30, 2020 when compared to the corresponding period last year, primarily due to a decrease in revenue in our Critical Infrastructure segment of $31.0 million, partially offset by an increase in our Federal Solutions segment of $12.0 million.
−Removed: Revenue increased $37.3 million for the nine months ended September 30, 2020 when compared to the corresponding period last year, primarily due to an increase in revenue in our Federal Solutions segment of $70.5 million, offset by a decrease in our Critical Infrastructure segment of $33.2 million.
+Added: March 31, 2021
+Added: March 31, 2020
+Added: Revenue decreased $96.3 million for the three months ended March 31, 2021 when compared to the corresponding period last year, primarily due to a decrease in revenue in our Critical Infrastructure segment of $70.8 million and a decrease in our Federal Solutions segment of $25.5 million.
See “Segment Results” below for a further discussion.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Direct costs of contracts
−Removed: Direct cost of contracts decreased $9.8 million for the three months ended September 30, 2020 when compared to the corresponding period last year, primarily due to a decrease of $25.3 million in our Critical Infrastructure segment and an increase of $15.5 million in our Federal Solutions segment.
−Removed: The decrease in our Critical Infrastructure segment was primarily due to programs with high levels of pass-through costs reaching substantial completion.
−Removed: The increase in our Federal Solutions segment was primarily due to an increase in business volume and increased pass-through costs.
−Removed: Direct cost of contracts increased $10.2 million for the nine months ended September 30, 2020 when compared to the corresponding period last year, primarily due to an increase of $56.5 million in our Federal Solutions segment offset by a decrease of $46.3 million in our Critical Infrastructure segment.
−Removed: The increase in our Federal Solutions segment was primarily from increased pass-through costs.
−Removed: The decrease in our Critical Infrastructure segment was primarily due to programs with high levels of pass-through costs reaching substantial completion.
+Added: Direct cost of contracts decreased $100.6 million for the three months ended March 31, 2021 when compared to the corresponding period last year, primarily due to decreases of $71.7 million in our Critical Infrastructure segment and $28.9 million in our Federal Solutions segment.
+Added: The decrease in our Critical Infrastructure segment was primarily due to a decrease in business volume, particularly programs with high levels of pass-through costs reaching substantial completion.
+Added: The decrease in our Federal Solutions segment was primarily due to a decrease in business volume.
Equity in earnings of unconsolidated joint ventures
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Equity in earnings of unconsolidated joint ventures
−Removed: Equity in earnings of unconsolidated joint ventures increased $9.5 million for the three months ended September 30, 2020 compared to the corresponding period last year, primarily related to increased activity and margins in certain joint ventures, partially offset by reduction in activity on a significant joint venture that is substantially complete.
−Removed: Equity in earnings of unconsolidated joint ventures decreased $2.7 million for the nine months ended September 30, 2020 compared to the corresponding period last year, primarily due to reduction in activity on a significant joint venture that is substantially complete, partially offset by increased margins and activity in certain joint ventures.
−Removed: Indirect, general and administrative expenses
+Added: Equity in earnings of unconsolidated joint ventures increased $1.4 million for the three months ended March 31, 2021 compared to the corresponding period last year, primarily related to increased activity and margins in certain joint ventures, partially offset by reduction in activity on others.
+Added: Selling, general and administrative expenses
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: Indirect, general and administrative expenses
−Removed: Indirect, general and administrative expenses (“IG&A”) for the three months ended September 30, 2020 and September 30, 2019 include $(1.0) million and $(1.7) million, respectively, and for the nine months ended September 30, 2020 and September 30, 2019 include $4.1 million and $45.5 million, respectively, of compensation cost (income) related to equity-based awards.
+Added: March 31, 2021
+Added: March 31, 2020
+Added: Selling, general and administrative expenses
+Added: Selling, general and administrative expenses (“SG&A”) for the three months ended March 31, 2021 and March 31, 2020 include $7.0 million and $(7.7) million, respectively, of compensation cost (income) related to equity-based awards.
Equity awards issued prior to the Company’s IPO settle in cash and are remeasured to an updated fair value at each reporting period until the award is settled.
3 unchanged sentences
Subsequent to the IPO, the share price of the Company’s common stock is based on quoted prices on the New York Stock Exchange.
−Removed: Excluding the compensation costs discussed above, IG&A for the three months e nded September 30 , 2020 and September 30 , 2019 was $ 1 66 .
−Removed: 9 million and $ 18 0 .
−Removed: 2 million, respectively , and for the nine months ended September 30, 2020 and September 30, 2019 was $ 533.
−Removed: 2 million and $ 535 .
−Removed: 9 million, respectively
−Removed: The decrease in IG&A of $13.3 million, exclusive of equity compensation cost, for the three months ended September 30, 2020 when compared to the corresponding period last year was primarily due to a $6.5 million reduction in transaction-related costs, a $2.5 million reduction in intangible asset amortization, and a $6.9 million reduction in other overhead expenses.
−Removed: These decreases were partially offset by $2.6 million increase in expenses associated with business acquisitions.
−Removed: The decrease in IG&A of $2.7 million, exclusive of equity compensation cost, for the nine months ended September 30, 2020 when compared to the corresponding period last year was primarily due to a $20.4 million reduction in transaction-related costs, a $7.1 million reduction in intangible asset amortization, and a $3.2 million reduction in restructuring and other expenses.
−Removed: These decreases were partially offset by additional expenses of $19.3 million associated with business acquisitions, $3.7 million due to a tax law change, and $5.0 million related to strategic growth initiatives and public company operating costs.
+Added: Excluding the compensation costs discussed above, SG&A for the three months ended March 31, 2021 and March 31, 2020 was $180.5 million and $191.5 million, respectively.
+Added: The decrease in SG&A of $11.0 million, exclusive of equity compensation cost, for the three months ended March 31, 2021 when compared to the corresponding period last year was primarily due to a $9.7 million reduction in transaction-related costs and $3.1 million reduction in other costs.
+Added: These decreases were partially offset by a $1.8 million increase in intangible asset amortization.
Total other income (expense)
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Interest income
7 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Income tax expense
−Removed: As described in “Note 11 – Income Taxes,” in the notes to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, in connection with the Company’s IPO on May 8, 2019, the Company converted from an “S” Corporation to a “C” Corporation.
−Removed: On a pro forma basis, if the Company had been taxed as a “C” Corporation for the three months and nine months ended September 30, 2019, the pro forma effective tax rate would have been 35.14% and 41.40%, respectively, and the pro forma income tax expense would have been $16.1 million and $19.8 million, respectively.
−Removed: The Company’s effective tax rate was 25.61% and 26.39% and income tax expense was $16.0 million and $33.0 million for the three months and nine months ended September 30, 2020, respectively.
−Removed: The most significant items contributing to the change in the effective tax rate relate to a nonrecurring item included in the third quarter of 2019 associated with equity compensation and a change in jurisdictional earnings.
+Added: The Company’s effective tax rate was 27.7% and 26.1% and income tax expense was $5.4 million and $5.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively.
+Added: The most significant items contributing to the change in the effective tax rate relate to an increase of foreign losses which have no tax benefit and a settlement of a state tax audit.
The difference between the statutory U.S.
−Removed: federal income tax rate of 21.0% and the effective tax rate for the quarter ended September 30, 2020 primarily relates to state income taxes and a recorded valuation allowance on foreign tax credits, partially offset by benefits related to income attributable to noncontrolling interest and federal research tax credits .
−Removed: The termination of the “S” Corporation status was treated as a change in tax status for Accounting Standards Codification 740, Income Taxes.
−Removed: These rules require that the deferred tax effects of a change in tax status to be recorded to income from continuing operations on the date the “S” Corporation status terminates.
−Removed: At the quarter ended September
−Removed: 30, 2019, the Company had recorded $85 million for the estimated effect of the change in tax status, relating to the recognition of net deferred tax assets for temporary differences in existence on the date of conversion to a “C” Corporation.
−Removed: This estimated amount was revised to $93.9 million at December 31, 2019 and subsequently adjusted to $93.2 million upon filing of the 2019 tax returns .
+Added: federal income tax rate of 21.0% and the effective tax rate for
+Added: the quarter ended March 31, 2021 primarily relates to state income taxes and a recorded valuation allowance on foreign tax credits, partially offset by benefits related to income attributable to noncontrolling interest and federal research tax credits .
Segment Results
5 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Federal Solutions Adjusted EBITDA attributable to Parsons Corporation
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Adjusted EBITDA attributable to Parsons Corporation
−Removed: The increase in Federal Solutions revenue for the three and nine months ended September 30, 2020 compared to the corresponding periods last year was primarily due to an increase in business volume from new and existing contracts.
−Removed: The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three months ended September 30, 2020 compared to the corresponding period last year was primarily due to generally lower profit margins driven by an increase in volume on contracts with pass-through costs.
−Removed: The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the nine months ended September 30, 2020 compared to the corresponding period last year was primarily due to an increase in IG&A from business acquisitions and lower margins, offset by an increase in business volume from new awards and business acquisitions.
+Added: The decrease in Federal Solutions revenue for the three months ended March 31, 2021 compared to the corresponding periods last year was primarily due to a decrease in business volume.
+Added: The increase in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three months ended March 31, 2021 compared to the corresponding period last year was primarily related to higher profits margins and acquisitions, offset by lower business volume.
Critical Infrastructure
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: September 30, 2020
−Removed: September 30, 2019
+Added: March 31, 2021
+Added: March 31, 2020
Adjusted EBITDA attributable to Parsons Corporation
−Removed: The decrease in Critical Infrastructure revenue for the three and nine months ended September 30, 2020 compared to the corresponding periods last year was primarily due to a decrease in business volume on contracts with pass-through revenue.
−Removed: The increase in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the three months ended September 30, 2020 was primarily related to an increase in equity in earnings of unconsolidated joint ventures and a decrease in IG&A.
−Removed: The increase in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the nine months ended September 30, 2020 was primarily related to a decrease in IG&A and improved project margins.
−Removed: Offsetting the increase in Adjusted EBITDA attributable to Parsons Corporation was a decrease in equity in earnings.
+Added: The decrease in Critical Infrastructure revenue for the three months ended March 31, 2021 compared to the corresponding periods last year was primarily due to a decrease in business volume on contracts with pass-through revenue.
+Added: The increase in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the three months ended March 31, 2021 was primarily related to a decrease in SG&A, an increase in contract profitability and an increase in equity in earnings of unconsolidated joint ventures.
Liquidity and Capital Resources
−Removed: Historically, we have financed our operations and capital expenditures and satisfied redemptions of ESOP interests through a combination of internally generated cash from operations, our Senior Notes and from borrowings under our Revolving Credit Facility.
+Added: We finance our operations and capital expenditures through a combination of internally generated cash from operations, our Senior Notes, Convertible Senior Notes, and periodic borrowings under our Revolving Credit Facility.
Generally, cash provided by operating activities has been adequate to fund our operations.
2 unchanged sentences
We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Credit Agreement.
−Removed: There are likely to be certain impacts in our ability to collect accounts receivable as a result of the economic impacts from the COVID-19 pandemic.
−Removed: Accounts receivable reflect amounts due from both commercial and government customers.
−Removed: Our commercial customers are comprised principally of large, well-known and well-established companies.
−Removed: Our government customers are comprised principally of national, state and local agencies in the U.S.
−Removed: and Middle East.
−Removed: We have not seen and do not expect there to be a risk of non-payment from either our government agency or commercial customers.
−Removed: We have experienced payment delays due to administrative limitations from both types of customers.
−Removed: As of September 30, 2020, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility, which totals $505.1 million as of September 30, 2020.
−Removed: We do not currently anticipate that the COVID-19 pandemic related economic impacts will impair the Company’s ability to continue to maintain compliance with its debt covenants or access available borrowing capacity from our banks.
+Added: As of March 31, 2021, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility.
+Added: We do not anticipate that the COVID-19 pandemic-related economic impacts will impair our ability to continue to maintain compliance with our debt covenants or access available borrowing capacity from our banks.
Cash received from customers, either from the payment of invoices for work performed or for advances in excess of revenue recognized, is our primary source of cash.
9 unchanged sentences
We focus on collecting outstanding receivables to reduce Net DSO and working capital.
−Removed: Net DSO was 69 days at September 30, 2020 and 58 days at September 30, 2019.
−Removed: In addition to the COVID-19 impacts discussed above, the increase in DSO was also impacted by certain administrative activities by certain customers which have delayed the payment of invoices.
−Removed: working capital (current assets less current liabilities) was $835.1 million at September 30 , 2020 and $382.0 million at December 31 , 201 9 .
−Removed: Our cash, cash equivalents and restricted cash increased by $422.4 million to $617.8 million at September 30, 2020 from $195.4 million at December 31, 2019.
+Added: Net DSO was 71 days at March 31, 2021 and 64 days at March 31, 2020.
+Added: Our working capital (current assets less current liabilities) was $691.5 million at March 31, 2021 and $655.7 million at December 31, 2020.
+Added: Our cash, cash equivalents and restricted cash decreased by $87.8 million to $399.4 million at March 31, 2021 from $487.2 million at December 31, 2020.
The following table summarizes our sources and uses of cash over the periods presented (in thousands):
−Removed: Nine Months Ended
−Removed: September 30, 2020
−Removed: September 30, 2019
−Removed: Net cash provided by operating activities
+Added: Three Months Ended
+Added: March 31, 2021
+Added: March 31, 2020
+Added: Net cash used in operating activities
Net cash used in investing activities
−Removed: Net cash provided by financing activities
+Added: Net cash (used in) provided by financing activities
Effect of exchange rate changes
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net decrease in cash, cash equivalents and restricted cash
Operating Activities
−Removed: Net cash provided by operating activities consists primarily of net income (loss) adjusted for noncash items, such as:
+Added: Net cash used in operating activities consists primarily of net income (loss) adjusted for noncash items, such as:
equity in earnings (loss) of unconsolidated joint ventures, contributions of treasury stock, depreciation and amortization of property and equipment and intangible assets, and provisions for doubtful accounts.
1 unchanged sentence
Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts.
−Removed: Net cash provided by operating activities decreased $17.2 million to $113.4 million for the nine months ended September 30, 2020 compared to $130.6 million of cash provided by operating activities for the nine months ended September 30, 2019.
−Removed: The change in net cash provided by operating activities is primarily from a $92.3 million increase in net income after adjusting for non-cash items, more than offset by a change of $28.7 million in other long-term liabilities, primarily driven by the payment of long-term employee incentives offset by the deferral of social security payroll taxes as described below and a $80.8 million increase in cash outflows from our working capital accounts (primarily from accounts receivable and contract liabilities offset by accrued expenses and contract assets).
−Removed: Under the CARES Act, the Company has been provided a net cash benefit of $26.2 million from the deferral of social security taxes otherwise due from April 10, 2020 through the quarter ended September 30, 2020 and will continue to defer employer social security taxes otherwise due for the remaining of the calendar year 2020;
−Removed: one-half of which are due December 31, 2021 and the second-half which are due December 31, 2022.
+Added: Net cash used in operating activities decreased $53.0 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.
+Added: The change in net cash used in operating activities is from a $6.9 million increase in net income after adjusting for non-cash items, a $23.8 million change in other long-term liabilities, and a $22.3 million decrease in cash outflows from our working capital accounts (primarily from accounts receivable and contract liabilities offset by accrued expenses, accounts payable and contract assets).
Investing Activities
−Removed: Net cash used in investing activities consists primarily of cash flows associated with capital expenditures and business acquisitions.
−Removed: Net cash used in investing activities decreased $505.6 million to $36.1 million for the nine months ended September 30, 2020, when compared to $541.7 million for the nine months ended September 30, 2019, primarily due to the use of $287.5 million, net of cash acquired, for the acquisition of OGSystems on January 7, 2019, and the use of $208.2 million, net of cash acquired, for the acquisition of QRC Technologies on July 31, 2019.
−Removed: The Company had no business acquisitions activity during the nine months ended September 30, 2020.
+Added: Net cash used in investing activities consists primarily of cash flows associated with capital expenditures, joint ventures and business acquisitions.
+Added: Net cash used in investing activities decreased $1.2 million for the three months ended March 31, 2021, when compared to the three months ended March 31, 2020, primarily due to a decrease in cash used for capital expenditures of $8.2 million, offset by proceeds from sale of investments in unconsolidated joint ventures, net of return of investments in unconsolidated joint ventures of $7.8 million.
+Added: The Company had no business acquisitions during the three months ended March 31, 2021 and March 31, 2020.
Financing Activities
Net cash provided by financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.
−Removed: Net cash provided by financing activities increased $67.8 million to $345.1 million for the nine months ended September 2020 compared to $277.3 million in net cash provided by financing activities for the nine months ended September 30, 2019.
−Removed: The change in cash flows from financing activities is primarily due to $348.5 million of net proceeds from the issuance of Convertible Senior Notes during the nine months ended September 30, 2020 compared to $536.9 million of IPO proceeds offset in part by net repayments of borrowings of $180 million and a dividend payment of $52.1 million during the nine months ended September 30, 2019.
+Added: Net cash provided by financing activities decreased $74.9 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.
+Added: The change in cash flows from financing activities is primarily due to no borrowings and larger distributions to noncontrolling interests.
Letters of Credit
We also have in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees.
−Removed: Letters of credit commitments outstanding under these bank lines aggregated $198.0 million as of September 30, 2020, including $44.9 million of letters of credit outstanding under the Credit Agreement.
−Removed: Total letters of credit outstanding at September 30, 2020 are $242.9 million.
+Added: Letters of credit commitments outstanding under these bank lines aggregated $203.9 million as of March 31, 2021.
+Added: Letters of credit outstanding under the Credit Agreement total $45.3 million.
Recent Accounting Pronouncements
1 unchanged sentence
Off-Balance Sheet Arrangements
−Removed: As of September 30, 2020, we have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
+Added: As of March 31, 2021, we have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.