What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-04 compared with 2021-05-05 · 157 added, 97 removed, 302 unchanged (46% of the section changed)

8 unchanged sentences

In response to the COVID-19 pandemic, the Company has taken certain actions to continue to execute under our contracts with customers and allow our people to work safely.

A substantial majority of our work-force transitioned to work-from-home status during the latter part of the quarter ended March 31, 2020, and these practices remain in effect as of the date of this filing.

A substantial majority of our workforce transitioned to work-from-home status during the latter part of the quarter ended March 31, 2020, and these practices remain largely in effect as of the date of this filing.

To date, we have experienced no material disruption in our work as a consequence of these changes in our work practices.

3 unchanged sentences

We continue to see several potential contract awards pushed out to a future date.

The Company is receiving limited benefits associated with the CARES Act related to its work on certain US national security projects;

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.

The reimbursement period for Section 3610 of the CARES Act was extended until March 31, 2021.

The Company received limited benefits associated with the CARES Act related to its work on certain US national security projects;

however, the curtailment of work under these projects and the CARES Act benefits did not have a material impact on our financial condition or results of operations.

The reimbursement period for Section 3610 of the CARES Act expired 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.

17 unchanged sentences

The following table sets forth selected key metrics (in thousands, except Book-to-Bill):

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

Awards (year to date)

Book-to-Bill (year to date)

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.

Difference between our backlog of $8.4 billion and our remaining unsatisfied performance obligations, or RUPO, of $5.1 billion, each as of June 30, 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

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 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.

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.

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.

The change in new awards in our Federal Solutions segment for the three and six months ended June 30, 2021 when compared to the corresponding periods last year were primarily impacted by one significant contract awarded in the second quarter of 2021.

The awards in Critical Infrastructure for the six months ended June 30, 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):

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

Federal Solutions:

3 unchanged sentences

Total Backlog (1)

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.

There was no impact on total Federal Solutions backlog or total backlog for Parsons Corporation.

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.

Difference between our backlog of $8.4 billion and our RUPO of $5.1 billion, each as of June 30, 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.

3 unchanged sentences

As a result, our federal contracts typically are only partially funded at any point during their term .

All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S.

A ll or some of the work to be performed under the contracts may remain unfunded unless and until the U.S.

Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We expect to recognize $2.7 billion of our funded backlog at March 31, 2021 as revenues in the following twelve months.

We expect to recognize $2.7 billion of our funded backlog at June 30, 2021 as revenues in the following twelve months.

However, our U.S.

9 unchanged sentences

Three months ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Federal Solutions

9 unchanged sentences

There is uncertainty around the timing, extent, nature and effect of Congressional and other U.S.

government actions to address budgetary constraints, caps on the discretionary budget for defense and non-defense departments and agencies, and the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both U.S.

government actions to address budgetary constraints, caps on the discretionary budget for defense and non-defense departments and

agencies, and the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both U.S.

government departments and agencies that are, and those that are not, subject to the caps.

50 unchanged sentences

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Time-and-materials

17 unchanged sentences

For the joint ventures we do not control, we recognize equity in earnings (loss) of unconsolidated joint ventures.

Our revenues included amounts related to services we provided

to our unconsolidated joint ventures for the three m onths ended March 31, 2021 and March 31, 2020 of $42.0 million and $ 40 .

4 million, respectively .

Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended June 30, 2021 and June 30, 2020 of $40.5 million and $42.4 million, respectively, and for the six months ended June 30, 2021 and June 30, 2020 of $82.4 million and $82.8 million, respectively.

Operating costs and expenses

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.

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.”

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.

Total ESOP contribution expense for the three months ended June 3 0 , 2021 and June 3 0 , 2020 was $ 1 3 .

4 million and $ 1 4 .

6 million , respectively , and for the six months ended June 30, 2021 and June 30, 2020 was $26.5 million and $29.5 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.

7 unchanged sentences

Adjusted EBITDA

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.

The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and six months ended June 30, 2021 and June 30, 2020.

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Adjusted EBITDA (1)

5 unchanged sentences

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Net income attributable to Parsons Corporation

22 unchanged sentences

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Federal Solutions Adjusted EBITDA attributable to Parsons Corporation

2 unchanged sentences

Total Adjusted EBITDA

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.

The following table sets forth our results of operations for the three and six months ended June 30, 2021 and June 30, 2020 as a percentage of revenue.

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Direct costs of contracts

1 unchanged sentence

Selling, general and administrative expenses

Operating income (loss)

Operating income

Interest income

1 unchanged sentence

Other income, net

(Interest and other expense) gain associated with claim on long-term contract

Total other income (expense)

Income (loss) before income tax expense

Income before income tax expense

Income tax benefit (provision)

3 unchanged sentences

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

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.

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Revenue decreased $100.1 million for the three months ended June 30, 2021 when compared to the corresponding period last year, primarily due to a decrease in revenue in our Critical Infrastructure segment of $60.6 million and a decrease in our Federal Solutions segment of $39.5 million.

Revenue decreased $196.4 million for the six months ended June 30, 2021 when compared to the corresponding period last year, primarily due to a decrease in our Critical Infrastructure segment of $131.4 million and a decrease in our Federal Solutions segment of $65.0 million.

See “Segment Results” below for a further discussion.

1 unchanged sentence

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Direct costs of contracts

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.

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.

Direct cost of contracts decreased $69.0 million for the three months ended June 30, 2021 when compared to the corresponding period last year, primarily due to decreases of $39.6 million in our Critical Infrastructure segment and $29.4 million in our Federal Solutions segment.

The decrease in our Critical Infrastructure segment was primarily due to a decrease in business volume, particularly the winding down of several programs with high levels of pass-through costs.

The decrease in our Federal Solutions segment was primarily due to a decrease in business volume.

Direct cost of contracts decreased $169.5 million for the six months ended June 30, 2021 when compared to the corresponding period last year, primarily due to decreases of $111.2 million in our Critical Infrastructure segment and $58.3 million in our Federal Solutions segment.

The decrease in our Critical Infrastructure segment was primarily due to a decrease in business volume, particularly the winding down of several programs with high levels of pass-through costs.

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

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Equity in earnings of unconsolidated joint ventures

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.

Equity in earnings of unconsolidated joint ventures increased $5.7 million and $7.1 million for the three and six months ended June 30, 2021 compared to the corresponding periods last year, primarily related to new joint ventures, and increased activity and margins in certain existing joint ventures, partially offset by write-downs of $1.6 million and $5.1 million for the three and six months ended June 30, 2021, respectively, on an unconsolidated joint venture in the Critical Infrastructure segment and reductions in activity on others.

Selling, general and administrative expenses

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Selling, general and administrative expenses

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.

Compensation cost is trued-up at each reporting period for changes in fair value pro-rated for the portion of the requisite service period rendered.

Selling, general and administrative expenses (“SG&A”) for the three months ended June 30, 2021 and June 30, 2020 include $4.9 million and $12.9 million, respectively, and for the six months ended June 30, 2021 and June 30, 2020 include $11.9 million and $5.1 million, respectively, of compensation cost related to equity-based awards.

Equity awards issued prior to the Company’s IPO were settled in cash and were remeasured to an updated fair value at each reporting period until the award was settled.

Compensation cost was trued-up at each reporting period for changes in fair value pro-rated for the portion of the requisite service period rendered.

Prior to the IPO on May 8, 2019, the fair value of a share of the Company’s common stock was established by the ESOP trustee.

1 unchanged sentence

Subsequent to the IPO, the share price of the Company’s common stock is based on quoted prices on the New York Stock Exchange.

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.

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.

These decreases were partially offset by a $1.8 million increase in intangible asset amortization.

Excluding the compensation costs discussed above, SG&A for the three months ended June 30, 2021 and June 30, 2020 was $183.3 million and $174.8 million, respectively and for the six months ended June 30, 2021 and June 30, 2020 was $363.9 million and $366.3 million, respectively.

The increase in SG&A of $8.5 million, exclusive of equity compensation cost, for the three months ended June 30, 2021 when compared to the corresponding period last year was primarily due to a $6.3 million increase in transaction-related costs, a $5.4 million increase from acquisitions, and a $2.4 million increase in intangible asset amortization.

These increases were partially offset by a $1.0 million decrease in restructuring costs and $4.6 million decrease in other costs.

The decrease in SG&A of $2.4 million, exclusive of equity compensation cost, for the six months ended June 30, 2021 when compared to the corresponding period last year was primarily due to a $3.3 million decrease in transaction-

related costs, a $1.0 million decrease in restructuring costs and $ 13 .

0 million decrease in other costs.

These were partially offset by a $10.7 million increase from acquisitions and a $4.2 million increase in intangible asset amortization .

Total other income (expense)

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Interest income

7 unchanged sentences

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Income tax expense

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.

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.

federal income tax rate of 21.0% and the effective tax rate for

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 .

The Company’s effective tax rate was 24.2% and 27.6% for the three months ended June 30, 2021 and 2020, respectively.

The change in the effective tax rate was due primarily to an increase in untaxed income attributable to noncontrolling interests and a change in jurisdictional earnings.

The Company’s effective tax rate for the six months ended June 30, 2021 and June 30, 2020 was 26.1% and 27.2%, respectively.

The change in effective tax rate was due primarily to an increase in untaxed income attributed to noncontrolling interests and a change in jurisdictional earnings, partially offset by an increase in foreign tax losses which will not provide any tax benefit and a settlement of a state tax audit.

The difference between the effective tax rate and the statutory U.S.

Federal income tax rate of 21.0% for the three and six months ended June 30, 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 interests and federal research tax credits .

Segment Results

5 unchanged sentences

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Federal Solutions Adjusted EBITDA attributable to Parsons Corporation

4 unchanged sentences

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Adjusted EBITDA attributable to Parsons Corporation

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.

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.

The decrease in Federal Solutions revenue for the three and six months ended June 30, 2021 compared to the corresponding periods last year was primarily due to a decrease in business volume from program completions and wind-downs, a reserve taken on a program, and the competitive hiring environment for cleared personnel.

The decreases were partially offset by increases from business acquisition of $29.3 million and $60.3 million for the three and six months ended June 30, 2021, respectively.

The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three and six months ended June 30, 2021 compared to the corresponding periods last year was primarily related to a $6.9 million net impact from a reserve taken on a program during the second quarter of 2021, compared to a $9.0 million incentive fee recognized during the second quarter of 2020 in addition to decline in business volume.

Critical Infrastructure

Three Months Ended

Six Months Ended

dollars in thousands)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Adjusted EBITDA attributable to Parsons Corporation

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.

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.

The decrease in Critical Infrastructure revenue for the three and six months ended June 30, 2021 compared to the corresponding periods last year was primarily due to a decrease in business volume from program completions and a write down on a project during the second quarter of 2021.

The decrease in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the three and six months ended June 30, 2021 was primarily related to a $15.4 million write down on a project, partially offset by an increase in equity in earnings of unconsolidated joint ventures.

Liquidity and Capital Resources

4 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.

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.

As of June 30, 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.

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.

During July 2021, we paid the $50 million Series A tranche of our Senior Note which had a scheduled maturity of July 15, 2021.

See “Note 10—Debt and Credit Facilities” in the notes to the consolidated financial statements in this Form 10-Q for further information.

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.

Net DSO was 71 days at March 31, 2021 and 64 days at March 31, 2020.

Our working capital (current assets less current liabilities) was $691.5 million at March 31, 2021 and $655.7 million at December 31, 2020.

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.

Net DSO was 68 days at June 30, 2021 and 69 days at June 30, 2020.

The decrease in DSO was primarily due to strong cash collections during the second quarter of 2021.

Our working capital (current assets less current liabilities) was $717.0 million at June 30, 2021 and $655.7 million at December 31, 2020.

Our cash, cash equivalents and restricted cash decreased by $2.6 million to $484.6 million at June 30, 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) :

Three Months Ended

March 31, 2021

March 31, 2020

Net cash used in operating activities

Six Months Ended

June 30, 2021

June 30, 2020

Net cash provided by (used in) operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes

1 unchanged sentence

Operating Activities

Net cash used in operating activities consists primarily of net income (loss) adjusted for noncash items, such as:

Net cash provided by (used in) operating activities consists primarily of net income 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.

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.

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).

Net cash provided by operating activities increased $69.9 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

The change in net cash from operating activities is attributable to a $71.6 million increase in cash inflows from our working capital accounts (primarily from accounts receivable and contract liabilities offset by accrued expenses, accounts payable and contract assets) and a $17.6 million change in other long-term liabilities, partially offset by a $19.4 million decrease in net income after adjusting for non-cash items.

Investing Activities

Net cash used in investing activities consists primarily of cash flows associated with capital expenditures, joint ventures and business acquisitions.

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.

The Company had no business acquisitions during the three months ended March 31, 2021 and March 31, 2020.

Net cash used in investing activities decreased $6.0 million for the six months ended June 30, 2021, when compared to the six months ended June 30, 2020, primarily due to proceeds from sale of investments in unconsolidated joint ventures of $14.3 million and a decrease in cash used for capital expenditures of $13.8 million, partially offset by increased investments in unconsolidated joint ventures of $22.5 million.

The Company had no business acquisitions during the six months ended June 30, 2021 and June 30, 2020.

Financing Activities

Net cash provided by financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.

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.

The change in cash flows from financing activities is primarily due to no borrowings and larger distributions to noncontrolling interests.

Net cash used in financing activities increased $21.4 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

The change in cash flows from financing activities is primarily due to 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.

Letters of credit commitments outstanding under these bank lines aggregated $203.9 million as of March 31, 2021.

We have in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees.

Letters of credit commitments outstanding under these bank lines aggregated to $219.2 million as of June 30, 2021.

Letters of credit outstanding under the Credit Agreement total $45.0 million.

2 unchanged sentences

Off-Balance Sheet Arrangements

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.

As of June 30, 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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis