6 unchanged sentences
Actual results may differ materially from those contained in any forward-looking statements.
−Removed: COVID-19 Pandemic
−Removed: 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.
−Removed: 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.
−Removed: To date, we have experienced no material disruption in our work as a consequence of these changes in our work practices.
−Removed: The Company has experienced an impact in the volume of work in both the Federal Solutions and Critical Infrastructure segments where customers have restricted access to certain project sites.
−Removed: We have not seen any substantive cancellations of previously awarded contracts.
−Removed: In the Federal Solutions segment, we have had some existing contracts extended.
−Removed: We continue to see several potential contract awards pushed out to a future date.
−Removed: The Company received limited benefits associated with the CARES Act related to its work on certain US national security projects;
−Removed: 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.
−Removed: The reimbursement period for Section 3610 of the CARES Act expired September 30, 2021.
−Removed: 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.
−Removed: The Company anticipates substantially all of the Company’s subcontractors and material suppliers will be able to fulfill their contractual obligations and we do not expect a material impact from non-performance.
−Removed: The ultimate impact from the COVID-19 pandemic is difficult to predict.
−Removed: While many uncertainties exist, we currently anticipate no material change in our financial condition or results of operations.
PARSONS CORPORATION Enabling a safer, smarter, and more interconnected world.
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 innovative technology provider in the global defense, intelligence and critical infrastructure markets.
−Removed: We provide software and hardware products, technical services and integrated solutions to support our customers’ missions.
−Removed: We have developed significant expertise and differentiated capabilities in key areas of cybersecurity, intelligence, missile defense, C5ISR, space, geospatial, and connected communities.
−Removed: By combining our talented team of professionals and advanced technology, we help solve complex technical challenges to enable a safer, smarter and more interconnected world.
+Added: We are a leading provider of the integrated solutions and services required in today’s complex security environment and a world of digital transformation.
+Added: We deliver innovative technology-driven solutions to customers worldwide.
+Added: We have developed significant expertise and differentiated capabilities in key areas of cybersecurity, intelligence, missile defense, C5ISR, space, transportation, water/wastewater and environmental remediation.
+Added: By combining our talented team of professionals and advanced technology, we solve complex technical challenges to enable a safer, smarter, more secure and more connected world.
We operate in two reporting segments, Federal Solutions and Critical Infrastructure.
3 unchanged sentences
These contracts are often multi-year, which provides us backlog and visibility on our revenues for future periods.
−Removed: Many of our contracts and task orders are subject to renewal and rebidding at the end of their term, and some are subject to the exercise of contract options and issuance of task orders by the applicable government entity.
+Added: Many of our contracts and task orders are subject to renewal and rebidding at the end of their term, and some are subject to the exercise of contract options and issuance of task orders by the applicable government
In addition to focusing on increasing our revenues through increased contract awards and backlog, we focus our financial performance on margin expansion and cash flow.
1 unchanged sentence
The following table sets forth selected key metrics (in thousands, except Book-to-Bill):
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Awards (year to date)
Book-to-Bill (year to date)
−Removed: Difference between our backlog of $8.6 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.0 billion, each as of September 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.
+Added: Difference between our backlog of $8.2 billion and our remaining unsatisfied performance obligations, or RUPO, of $5.5 billion, each as of March 31, 2022, 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, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
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 three months ended September 30, 2021 when compared to the corresponding period last year was primarily impacted by one large contract awarded in the third quarter of 2020.
−Removed: The change in new awards in our Federal Solutions segment for the nine months ended September 30, 2021 when compared to the corresponding period last year was primarily impacted by one significant contract awarded in the second quarter of 2021.
−Removed: The awards in Critical Infrastructure for the nine months ended September 30, 2021 were impacted by several large contracts awarded in the first quarter of 2021.
+Added: The change in new awards in our Federal Solutions segment for the three months ended March 31, 2022 when compared to the corresponding period last year was primarily due to two large contracts awarded in the first quarter of 2022.
+Added: The awards in Critical Infrastructure for the three months ended March 31, 2022 were lower due to several large contracts awarded in the first quarter of 2021.
We define backlog to include the following two components:
−Removed: Funded—Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.
−Removed: Unfunded—Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized less revenue previously recognized on these contracts.
+Added: Funded—Funded backlog represents future revenue anticipated from orders for services under existing contracts for which funding is appropriated or otherwise authorized.
+Added: Unfunded—Unfunded backlog represents future revenue anticipated from orders for services under existing contracts for which funding has not been appropriated or otherwise authorized.
Backlog includes (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.
1 unchanged sentence
(in thousands) :
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Federal Solutions:
3 unchanged sentences
Total Backlog (1)
−Removed: Difference between our backlog of $8.6 billion and our RUPO of $6.0 billion, each as of September 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.
+Added: Difference between our backlog of $8.2 billion and our RUPO of $5.5 billion, each as of March 31, 2022, 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 $2.9 billion of our funded backlog at September 30, 2021 as revenues in the following twelve months.
+Added: We expect to recognize $2.8 billion of our funded backlog at March 31, 2022 as revenues in the following twelve months.
However, our U.S.
9 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Federal Solutions
2 unchanged sentences
We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section.
−Removed: Our operating performance will depend upon many variables, including
−Removed: the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control.
+Added: Our operating performance will depend upon many variables, including the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control.
Government Spending
23 unchanged sentences
Acquired Operations
+Added: BlackHorse Solutions, Inc.
+Added: On July 6, 2021, we acquired BlackHorse for $205.0 million.
+Added: BlackHorse expands Parsons’ capabilities and products in next-generation military, intelligence, and space operations, specifically in cyber electronic warfare, and information dominance.
+Added: The acquisition was funded by cash on-hand.
+Added: The financial results of BlackHorse have been included in our consolidated results of operations from July 6, 2021 onward.
Echo Ridge LLC
5 unchanged sentences
The financial results of Echo Ridge have been included in our consolidated results of operations from July 30, 2021 onward.
−Removed: BlackHorse Solutions, Inc.
−Removed: On July 6, 2021, we acquired BlackHorse for $205.0 million.
−Removed: BlackHorse expands Parsons’ capabilities and products in next-generation military, intelligence, and space operations, specifically in cyber electronic warfare, and information dominance.
−Removed: The acquisition was funded by cash on-hand.
−Removed: The financial results of BlackHorse have been included in our consolidated results of operations from July 6, 2021 onward.
−Removed: Braxton Science & Technology Group, LLC
−Removed: On November 19, 2020, we acquired Braxton for $309.5 million.
−Removed: Braxton operates at the forefront of satellite operations, ground system automation, flight dynamics, and spacecraft and antenna simulation for the U.S.
−Removed: Department of Defense and Intelligence Community.
−Removed: The acquisition was funded by cash on-hand.
−Removed: The financial results of Braxton have been included in our consolidated results of operations from November 19, 2020 onward.
Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses.
16 unchanged sentences
federal government and our Critical Infrastructure segment derives revenue primarily from government and commercial customers.
−Removed: We recognize revenue for work performed under cost-plus, time-and-materials and fixed-price contracts as follows:
+Added: We enter into the following types of contracts with our customers:
Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs incurred, plus a fee.
4 unchanged sentences
Under fixed-price contracts, clients pay an agreed fixed-amount negotiated in advance for a specified scope of work.
−Removed: Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and “Note 2—Summary of Significant Accounting Polices” in the notes to our consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2020 for a description of our policies on revenue recognition.
+Added: Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and “Note 2—Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2021 for a description of our policies on revenue recognition.
The table below presents the percentage of total revenue for each type of contract.
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Time-and-materials
10 unchanged sentences
Over time, we have experienced a relatively stable contract mix.
−Removed: Our recognition of revenue on long-term contracts requires the use of assumptions related to transaction price and total cost of completion.
+Added: Our recognition of profit 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, 2021 and September 30, 2020 of $37.1 million and $42.0 million, respectively, and for the nine months ended September 30, 2021 and September 30, 2020 of $119.5 million and $124.7 million, respectively.
+Added: Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended March 31, 2022 and March 31, 2021 of $47.3 million and $53.7 million, respectively.
Operating costs and expenses
1 unchanged sentence
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, 2021 and September 30, 2020 was $14.8 million and $12.5 million, respectively, and for the nine months ended September 30, 2021 and September 30, 2020 was $41.3 million and $42.0 million, respectively, and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.”
+Added: Total ESOP contribution expense for the three months ended March 31, 2022 and March 31, 2021 was $13.1 million and $13.2 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
−Removed: The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2021 and September 30, 2020.
+Added: The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three months ended March 31, 2022 and March 31, 2021.
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Adjusted EBITDA (1)
5 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Net income attributable to Parsons Corporation
18 unchanged sentences
Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized.
−Removed: Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA
−Removed: supplementally.
+Added: Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA supplementally.
Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
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, 2021 and September 30, 2020 as a percentage of revenue.
+Added: The following table sets forth our results of operations for the three months ended March 31, 2022 and March 31, 2021 as a percentage of revenue.
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Direct costs of contracts
12 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: Revenue decreased $48.2 million for the three months ended September 30, 2021 when compared to the corresponding period last year, primarily due to a decrease in revenue in our Critical Infrastructure segment of $49.3 million.
−Removed: Revenue decreased $244.6 million for the nine months ended September 30, 2021 when compared to the corresponding period last year, primarily due to a decrease in our Critical Infrastructure segment of $180.7 million and a decrease in our Federal Solutions segment of $63.9 million.
+Added: March 31, 2022
+Added: March 31, 2021
+Added: Revenue increased $74.4 million for the three months ended March 31, 2022 when compared to the corresponding period last year, due to increases in revenue in both our Federal Solutions and Critical Infrastructure segments of $39.6 million and $34.8 million, respectively.
See “Segment Results” below for a further discussion.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Direct costs of contracts
−Removed: Direct cost of contracts decreased $54.1 million for the three months ended September 30, 2021 when compared to the corresponding period last year, primarily due to decreases of $48.4 million in our Critical Infrastructure segment and $5.8 million in our Federal Solutions segment.
−Removed: 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.
−Removed: The decrease in our Federal Solutions segment was primarily due to decrease in business volume on lower margin contracts with pass-through costs.
−Removed: Direct cost of contracts decreased $223.7 million for the nine months ended September 30, 2021 when compared to the corresponding period last year, primarily due to decreases of $159.6 million in our Critical Infrastructure segment and $64.1 million in our Federal Solutions segment.
−Removed: 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.
−Removed: The decrease in our Federal Solutions segment was primarily due to a decrease in business volume.
+Added: Direct cost of contracts increased $64.8 million for the three months ended March 31, 2022 when compared to the corresponding period last year, primarily due to increases of $34.6 million in our Critical Infrastructure segment and $30.2 million in our Federal Solutions segment.
+Added: The increases were primarily due to an increase in business volume from recent contract awards and acquisitions.
Equity in earnings of unconsolidated joint ventures
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Equity in earnings of unconsolidated joint ventures
−Removed: Equity in earnings of unconsolidated joint ventures decreased $7.2 million for the three months ended September 30, 2021 compared to the corresponding period last year, primarily related to write-downs of $5.5 million.
−Removed: Equity in earnings of unconsolidated joint ventures increased $0.1 million for the nine months ended September 30, 2021 compared to the corresponding period last year, primarily related to new joint ventures and increased activity and margins in certain existing joint ventures, offset by write-downs of $10.6 million on an unconsolidated joint venture in the Critical Infrastructure segment and reductions in activity on others.
+Added: Equity in earnings of unconsolidated joint ventures decreased $1.9 million for the three months ended March 31, 2022 compared to the corresponding period last year, primarily related to a change order which will delay joint venture profits to future periods, partially offset by new joint ventures.
Selling, general and administrative expenses
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Selling, general and administrative expenses
−Removed: Selling, general and administrative expenses (“SG&A”) for the three months ended September 30, 2021 and September 30, 2020 include $3.2 million and $(1.1) million, respectively, and for the nine months ended September 30, 2021 and September 30, 2020 include $15.1 million and $4.1 million, respectively, of compensation cost related to equity-based awards.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: See “Note 19 – Fair Value of Financial Instruments” in the Company’s Form 10-K for the year ended December 31, 2020 for a further discussion of how a share of the Company’s common stock was valued prior to the IPO.
−Removed: 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, S G&A for the three months e nded September 30 , 202 1 and September 3 0 , 2020 was $ 1 8 8 .
−Removed: 0 million and $ 1 66 .
−Removed: 9 million, respectively , and for the nine months ended September 30, 2021 and September 30, 2020 was $ 551 .
−Removed: 9 million and $ 533 .
−Removed: 2 million, respectively .
−Removed: The increase in SG&A of $21.1 million, exclusive of equity compensation cost, for the three months ended September 30, 2021 when compared to the corresponding period last year was primarily due to a $8.7 million increase from acquisitions, a $7.1 million increase in insurance costs, and a $6.2 million increase in intangible asset amortization.
−Removed: These increases were partially offset by a $0.9 million decrease in other costs.
−Removed: The increase in SG&A of $18.7 million, exclusive of equity compensation cost, for the nine months ended September 30, 2021 when compared to the corresponding period last year was primarily due to a $19.4 million increase from acquisitions and an $11.0 million increase in intangible asset amortization.
−Removed: These were partially offset by a $5.0 million decrease in incentive costs, a $3.5 million decrease in transaction-related costs, and a $3.2 million decrease in other costs.
+Added: The decrease in SG&A of $2.4 million for the three months ended March 31, 2022 when compared to the corresponding period last year was primarily due to a $4.3 million decrease in intangible asset amortization and a $3.1 million decrease in stock-based compensation costs.
+Added: These decreases were partially offset by a $4.1 million increase from acquisitions and an increase of $0.9 million from other costs.
Total other income (expense)
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Interest income
3 unchanged sentences
Interest income is related to interest earned on cash balances held.
−Removed: Interest expense is primarily due to debt related to our business acquisitions and Convertible Senior Note.
+Added: Interest expense is primarily due to debt related to our business acquisitions and Convertible Senior Notes.
The amounts in other income (expense), net are primarily related to transaction gains and losses on foreign currency transactions and sublease income.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Income tax expense
−Removed: The Company’s effective tax rate was 25.5% and 25.6% for the three months ended September 30, 2021 and 2020, respectively.
−Removed: The decrease in the effective tax rate was due primarily to an increase in untaxed income attributable to noncontrolling interests , release of a valuation allowance on foreign tax credits utilized on the 2020 federal return, and a change in jurisdictional earnings, partially offset by a write down of a foreign tax receivable..
−Removed: The Company’s effective tax rate for the nine months ended September 30, 2021 and September 30, 2020 was 25.8% and 26.4%, respectively.
−Removed: The decrease in effective tax rate was due primarily to an increase in untaxed income attributed to noncontrolling interests, release of a valuation allowance on foreign tax credits utilized on the 2020 federal return, and a change in jurisdictional earnings, partially offset by a write down of a foreign tax receivable.
−Removed: The difference between the effective tax rate and the statutory U.S.
−Removed: Federal income tax rate of 21.0% for the three and nine months ended September 30, 2021 primarily relates to state income taxes, valuation allowance recorded against foreign tax credit carryovers, and a write down of the foreign tax receivable, partially offset by tax benefits related to untaxed income attributable to noncontrolling interests and federal research tax credits .
+Added: The Company’s effective tax rate was 25.4% and 27.7% and income tax expense was $8.1 million and $5.4 million for the three months ended March 31, 2022 and March 31, 2021, respectively.
+Added: The most significant items contributing to the change in the effective tax rate relate to a decrease of withholding tax and a change in the jurisdictional mix of earnings.
+Added: The difference between the statutory U.S.
+Added: federal income tax rate of 21.0% and the effective tax rate for the quarter ended March 31, 2022 primarily relates to state income taxes and an increased expense for uncertain tax positions, partially offset by benefits related to untaxed income attributable to noncontrolling interests and federal research tax credits .
Segment Results
5 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Federal Solutions Adjusted EBITDA attributable to Parsons Corporation
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Adjusted EBITDA attributable to Parsons Corporation
−Removed: Federal Solutions revenue for the three months ended September 30, 2021 compared to the corresponding period last year was flat primarily due to increases from business acquisitions of $51.6 million, offset by a decrease in business volume from program completions and wind-downs.
−Removed: The decrease in Federal Solutions revenue for the nine months ended September 30, 2021 compared to the corresponding period 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.
−Removed: The decreases were partially offset by increases from business acquisitions of $111.9 million for the nine months ended September 30, 2021, respectively.
−Removed: Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three months ended September 30, 2021 compared to the corresponding period last year was flat primarily due to offsetting increases related to acquisitions and decreases in business volume.
−Removed: The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the nine months ended September 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, partially offset by an increase related to acquisitions.
+Added: Federal Solutions revenue for the three months ended March 31, 2022 compared to the corresponding period last year increased primarily due to increases from business acquisitions of $20.0 million, and increases in business volume from recent contract awards.
+Added: Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three months ended March 31, 2022 compared to the corresponding period last year increased primarily due to increased business volume from recent contract awards and increases related to acquisitions.
Critical Infrastructure
Three Months Ended
−Removed: Nine Months Ended
dollars in thousands)
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: September 30, 2021
−Removed: September 30, 2020
+Added: March 31, 2022
+Added: March 31, 2021
Adjusted EBITDA attributable to Parsons Corporation
−Removed: The decrease in Critical Infrastructure revenue for the three and nine months ended September 30, 2021 compared to the corresponding periods last year was primarily due to a decrease in business volume from program completions, lower pass through revenue, and write downs on projects during the second and third quarters of 2021.
−Removed: The decrease in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the three months ended September 30, 2021 was primarily due to decrease in equity in earnings of unconsolidated joint ventures of $7.5 million, a write down on a project, and an increase to SG&A.
−Removed: The decrease in Adjusted EBITDA attributable to Parsons Corporation in Critical Infrastructure for the and nine months ended September 30, 2021 was primarily related to write downs on projects and a decrease in business volume.
+Added: The increase in Critical Infrastructure revenue for the three months ended March 31, 2022 compared to the corresponding periods last year was primarily due to an increase in business volume from recent contract awards and increased hiring activity.
+Added: Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation decreased for the three months ended March 31, 2022 primarily due to a decrease in equity in earnings driven by a change order which will delay joint venture profits to future periods, and an increase in selling, general and administrative expenses.
+Added: These decreases were partially offset by an increase in business volume from recent contract awards and increased hiring activity.
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 .
−Removed: As of September 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.
−Removed: 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.
−Removed: During July 2021, we paid the $50 million Series A tranche of our Senior Note which had a scheduled maturity of July 15, 2021.
−Removed: See “Note 10—Debt and Credit Facilities” in the notes to the consolidated financial statements in this Form 10-Q for further information.
+Added: As of March 31, 2022, 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.
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 68 days at September 30, 2021 and 69 days at September 30, 2020.
−Removed: Our working capital (current assets less current liabilities) was $525.9 million at September 30, 2021 and $655.7 million at December 31, 2020.
−Removed: Our cash, cash equivalents and restricted cash decreased by $210.5 million to $276.7 million at September 30, 2021 from $487.2 million at December 31, 2020.
+Added: Net DSO was 76 days at March 31, 2022 and 71 days at March 31, 2021.
+Added: The increase in Net DSO was primarily due to a decrease in accounts payable at March 31, 2022 compared to March 31, 2021.
+Added: Our working capital (current assets less current liabilities) was $632.1 million at March 31, 2022 and $601.6 million at December 31, 2021.
+Added: Our cash, cash equivalents and restricted cash decreased by $57.1 million to $286.8 million at March 31, 2022 from $343.9 million at December 31, 2021.
The following table summarizes our sources and uses of cash over the periods presented (in thousands):
−Removed: Nine Months Ended
−Removed: September 30, 2021
−Removed: September 30, 2020
−Removed: Net cash provided by operating activities
+Added: Three Months Ended
+Added: March 31, 2022
+Added: March 31, 2021
+Added: Net cash used in operating activities
Net cash used in investing activities
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
Effect of exchange rate changes
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash
+Added: Net decrease in cash, cash equivalents and restricted cash
Operating Activities
−Removed: Net cash provided by operating activities consists primarily of net income adjusted for noncash items, such as:
+Added: Net cash 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.
−Removed: Net cash provided by operating activities increased $2,275 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.
−Removed: The change in net cash from operating activities is attributable to a $39,283 increase in cash inflows from our working capital accounts (primarily from accounts receivable and contract assets offset by accrued expenses, accounts payable and prepaid expenses and other assets), partially offset by a $(35,309) decrease in net income after adjusting for non-cash items.
+Added: Net cash used in operating activities de creased $40.3 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 .
+Added: A primary driver of the change was due to legacy cash - settled long - term incentive plans which paid out their last cycle during the first quarter of 2021.
+Added: The Company paid $26.
+Added: 4 million related to these plans in the first quarter of 2021 compared to no payments during the first quarter of 2022.
+Added: Additionally, t he change in net cash from operating activities is attributable to a $23.7 million de crease in cash out flows from our working capital accounts (primarily from accrued expenses, contract liabilities, contract assets and prepaid and other expenses offset by accounts receivable and accounts payable) , partially offset by a $1.7 million de crease 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.
−Removed: Net cash used in investing activities in creased $194.4 million for the nine months ended September 3 0 , 2021 , when compared to the nine months ended September 3 0 , 2020 , primarily due to the use of $189.6 million, net of cash acquired, for the acquisition of BlackHorse Solutions on July 6, 2021, and the use of $8.4 million, net of cash acquired, for the acquisition of Echo Ridge on July 30, 2021.
−Removed: The Company had no business acquisitions during the nine months ended September 30, 2020.
−Removed: Net cash used in investing activities also increased due to increased investments in unconsolidated joint ventures of $ 2 8 .
−Removed: 1 million , partially offset by proceeds from sale of investments in unconsolidated joint ventures of $14.3 million and a decrease in cash used for capital expenditures of $ 16 .
+Added: Net cash used in investing activities increased $2.4 million for the three months ended March 31, 2022, when compared to the three months ended March 31, 2021, primarily due to no proceeds from sale of investments in unconsolidated joint ventures during the three months ended March 31 ,2022 compared to $14.3 million of proceeds during the three months ended March 31, 2021.
+Added: This was partially offset by decreased investments in unconsolidated joint ventures of $12.5 million.
+Added: The Company had no business acquisitions during the three months ended March 31, 2022 and 2021.
Financing Activities
−Removed: Net cash (used in) provided by financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.
−Removed: Net cash used in financing activities increased $440.8 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.
−Removed: The change in cash flows from financing activities is primarily due to repayment of the $50.0 million Series A tranche of our Senior Note during July 2021 and $348.5 million of net proceeds from the issuance of Convertible Senior Notes during the nine months ended September 30, 2020.
−Removed: The Company also had larger distributions to noncontrolling interests of $32.8 million.
+Added: Net cash used in financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.
+Added: Net cash used in financing activities increased $7.2 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
+Added: The change in cash flows from financing activities is primarily due to $5.5 million of repurchases of common stock under the stock repurchase program which began in August 2021.
Letters of Credit
We 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 to $221.2 million as of September 30, 2021.
+Added: Letters of credit commitments outstanding under these bank lines aggregated to $220.6 million as of March 31, 2022.
Letters of credit outstanding under the Credit Agreement total $44.5 million.
2 unchanged sentences
Off-Balance Sheet Arrangements
−Removed: As of September 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.
+Added: As of March 31, 2022, 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.