Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 19, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PSN | |
Entity Registrant Name | Parsons Corporation | |
Entity Central Index Key | 0000275880 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 104,888,937 | |
Entity File Number | 001-07782 | |
Entity Tax Identification Number | 95-3232481 | |
Entity Address, Address Line One | 14291 Park Meadow Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Chantilly | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20151 | |
City Area Code | 703 | |
Local Phone Number | 988-8500 | |
Title of 12(b) Security | Common Stock, $1 par value | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents (including $100,478 and $53,193 Cash of consolidated joint ventures) | $ 205,406 | $ 262,539 |
Accounts receivable, net (including $293,023 and $217,419 Accounts receivable of consolidated joint ventures, net) | 906,741 | 717,345 |
Contract assets (including $12,622 and $11,313 Contract assets of consolidated joint ventures) | 756,630 | 634,033 |
Prepaid expenses and other current assets (including $12,731 and $7,913 Prepaid expenses and other current assets of consolidated joint ventures) | 146,764 | 105,866 |
Total current assets | 2,015,541 | 1,719,783 |
Property and equipment, net (including $3,902 and $2,543 Property and equipment of consolidated joint ventures, net) | 99,344 | 96,050 |
Right of use assets, operating leases (including $7,011 and $6,315 Right of use assets, operating leases of consolidated joint ventures) | 158,400 | 155,090 |
Goodwill | 1,797,330 | 1,661,850 |
Investments in and advances to unconsolidated joint ventures | 164,858 | 107,425 |
Intangible assets, net | 282,098 | 254,127 |
Deferred tax assets | 148,512 | 137,709 |
Other noncurrent assets | 66,905 | 66,108 |
Total assets | 4,732,988 | 4,198,142 |
Current liabilities: | ||
Accounts payable (including $54,668 and $49,078 Accounts payable of consolidated joint ventures) | 266,345 | 201,428 |
Accrued expenses and other current liabilities (including $147,808 and $102,417 Accrued expenses and other current liabilities of consolidated joint ventures) | 771,912 | 630,193 |
Contract liabilities (including $72,168 and $40,654 Contract liabilities of consolidated joint ventures) | 277,249 | 213,064 |
Short-term lease liabilities, operating leases (including $3,507 and $2,552 Short-term lease liabilities, operating leases of consolidated joint ventures) | 56,930 | 59,144 |
Income taxes payable | 21,657 | 4,290 |
Total current liabilities | 1,394,093 | 1,108,119 |
Long-term employee incentives | 19,199 | 17,375 |
Long-term debt | 820,366 | 743,605 |
Long-term lease liabilities, operating leases (including $3,504 and $3,763 Long-term lease liabilities, operating leases of consolidated joint ventures) | 119,281 | 111,417 |
Deferred tax liabilities | 20,448 | 12,471 |
Other long-term liabilities | 111,501 | 109,220 |
Total liabilities | 2,484,888 | 2,102,207 |
Contingencies (Note 12) | ||
Shareholders' equity: | ||
Common stock, $1 par value; authorized 1,000,000,000 shares; 146,317,493 and 146,132,016 shares issued; 45,136,147 and 40,960,845 public shares outstanding; 59,752,326 and 63,742,151 ESOP shares outstanding | 146,318 | 146,132 |
Treasury stock, 41,429,020 shares at cost | (844,936) | (844,936) |
Additional paid-in capital | 2,729,206 | 2,717,134 |
Retained earnings | 158,945 | 43,089 |
Accumulated other comprehensive loss | (16,797) | (17,849) |
Total Parsons Corporation shareholders' equity | 2,172,736 | 2,043,570 |
Noncontrolling interests | 75,364 | 52,365 |
Total shareholders' equity | 2,248,100 | 2,095,935 |
Total liabilities and shareholders' equity | $ 4,732,988 | $ 4,198,142 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and cash equivalents | $ 205,406 | $ 262,539 |
Accounts receivable, net | 906,741 | 717,345 |
Contract assets | 756,630 | 634,033 |
Prepaid expenses and other current assets | 146,764 | 105,866 |
Property and equipment, net | 99,344 | 96,050 |
Right of use assets, operating leases | 158,400 | 155,090 |
Accounts payable | 266,345 | 201,428 |
Accrued expenses and other current liabilities | 771,912 | 630,193 |
Short-term lease liabilities, operating leases | 56,930 | 59,144 |
Long-term lease liabilities, operating leases | 119,281 | 111,417 |
Contract liabilities | $ 277,249 | $ 213,064 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares, issued | 146,317,493 | 146,132,016 |
Common stock, shares, outstanding | 45,136,147 | 40,960,845 |
Treasury stock, shares | 41,429,020 | 41,429,020 |
ESOP | ||
Common stock, shares, outstanding | 59,752,326 | 63,742,151 |
Consolidated Joint Ventures | ||
Cash and cash equivalents | $ 100,478 | $ 53,193 |
Accounts receivable, net | 293,023 | 217,419 |
Contract assets | 12,622 | 11,313 |
Prepaid expenses and other current assets | 12,731 | 7,913 |
Property and equipment, net | 3,902 | 2,543 |
Right of use assets, operating leases | 7,011 | 6,315 |
Accounts payable | 54,668 | 49,078 |
Accrued expenses and other current liabilities | 147,808 | 102,417 |
Short-term lease liabilities, operating leases | 3,507 | 2,552 |
Long-term lease liabilities, operating leases | 3,504 | 3,763 |
Contract liabilities | $ 72,168 | $ 40,654 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 |
Direct cost of contracts | 1,124,305 | 872,423 | 3,109,713 | 2,388,095 |
Equity in (losses) earnings of unconsolidated joint ventures | 10,262 | (974) | 4,497 | 10,237 |
Selling, general and administrative expenses | 221,188 | 196,960 | 632,393 | 581,969 |
Operating income | 83,340 | 64,013 | 210,914 | 132,333 |
Interest income | 492 | 382 | 1,591 | 618 |
Interest expense | (8,612) | (6,323) | (22,369) | (14,786) |
Other income (expense), net | (191) | (685) | 1,666 | (304) |
Total other income (expense) | (8,311) | (6,626) | (19,112) | (14,472) |
Income before income tax expense | 75,029 | 57,387 | 191,802 | 117,861 |
Income tax expense | (15,218) | (13,792) | (41,944) | (27,643) |
Net income including noncontrolling interests | 59,811 | 43,595 | 149,858 | 90,218 |
Net income attributable to noncontrolling interests | (12,364) | (14,024) | (33,617) | (21,685) |
Net income attributable to Parsons Corporation | $ 47,447 | $ 29,571 | $ 116,241 | $ 68,533 |
Earnings per share: | ||||
Basic | $ 0.45 | $ 0.29 | $ 1.11 | $ 0.66 |
Diluted | $ 0.42 | $ 0.27 | $ 1.03 | $ 0.62 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income including noncontrolling interests | $ 59,811 | $ 43,595 | $ 149,858 | $ 90,218 |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustment, net of tax | (1,929) | (7,134) | 1,046 | (9,643) |
Pension adjustments, net of tax | (11) | (68) | 6 | (93) |
Comprehensive income including noncontrolling interests, net of tax | 57,871 | 36,393 | 150,910 | 80,482 |
Comprehensive income attributable to noncontrolling interests, net of tax | (12,361) | (14,014) | (33,617) | (21,673) |
Comprehensive income attributable to Parsons Corporation, net of tax | $ 45,510 | $ 22,379 | $ 117,293 | $ 58,809 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 149,858 | $ 90,218 |
Adjustments to reconcile net income to net cash used in operating activities | ||
Depreciation and amortization | 87,202 | 90,668 |
Amortization of debt issue costs | 2,124 | 1,959 |
Loss (gain) on disposal of property and equipment | (27) | (261) |
Provision for doubtful accounts | 91 | (3) |
Deferred taxes | (8,205) | (6,334) |
Foreign currency transaction gains and losses | 1,479 | 3,502 |
Equity in losses (earnings) of unconsolidated joint ventures | (4,497) | (10,237) |
Return on investments in unconsolidated joint ventures | 30,328 | 25,626 |
Stock-based compensation | 23,872 | 14,991 |
Contributions of treasury stock | 44,072 | 41,980 |
Changes in assets and liabilities, net of acquisitions and newly consolidated joint ventures: | ||
Accounts receivable | (168,964) | (90,913) |
Contract assets | (120,414) | (62,861) |
Prepaid expenses and other assets | (40,470) | 8,772 |
Accounts payable | 48,294 | (918) |
Accrued expenses and other current liabilities | 93,263 | 20,220 |
Contract liabilities | 61,503 | 26,665 |
Income taxes | 17,395 | 1,160 |
Other long-term liabilities | 662 | (5,866) |
Net cash provided by operating activities | 217,566 | 148,368 |
Cash flows from investing activities: | ||
Capital expenditures | (30,877) | (19,784) |
Proceeds from sale of property and equipment | 274 | 573 |
Payments for acquisitions, net of cash acquired | (215,497) | (379,272) |
Investments in unconsolidated joint ventures | (81,598) | (13,637) |
Return of investments in unconsolidated joint ventures | 72 | 9,443 |
Proceeds from sales of investments in unconsolidated joint ventures | 381 | 0 |
Net cash used in investing activities | (327,245) | (402,677) |
Cash flows from financing activities: | ||
Proceeds from borrowings | 511,500 | 680,900 |
Repayments of borrowings | (436,500) | (579,700) |
Payments for debt costs and credit agreement | 0 | (870) |
Payments for acquired warrants | 0 | (11,243) |
Contributions by noncontrolling interests | 1,537 | 8,299 |
Distributions to noncontrolling interests | (12,156) | (14,290) |
Repurchases of common stock | (8,000) | (19,500) |
Taxes paid on vested stock | (6,941) | (6,135) |
Proceeds from issuance of common stock | 2,940 | 2,724 |
Net cash provided by financing activities | 52,380 | 60,185 |
Effect of exchange rate changes | 166 | (2,220) |
Net decrease in cash, cash equivalents, and restricted cash | (57,133) | (196,344) |
Cash, cash equivalents and restricted cash: | ||
Beginning of year | 262,539 | 343,883 |
End of period | $ 205,406 | $ 147,539 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Parsons Equity | Noncontrolling Interest |
Beginning balance at Dec. 31, 2021 | $ 1,937,112 | $ 146,277 | $ (867,391) | $ 2,684,979 | $ (53,529) | $ (9,568) | $ 1,900,768 | $ 36,344 |
Comprehensive income | ||||||||
Net income | 90,218 | 68,533 | 68,533 | 21,685 | ||||
Foreign currency translation gain (loss), net | (9,643) | (9,631) | (9,631) | (12) | ||||
Pension adjustments, net | (93) | (93) | (93) | |||||
Contributions | 8,299 | 8,299 | ||||||
Distributions | (14,290) | (14,290) | ||||||
Issuance of equity securities, net of retirements | (2,002) | 333 | (2,339) | 4 | (2,002) | |||
Repurchases of common stock | (19,500) | (522) | (18,978) | (19,500) | ||||
Stock-based compensation | 14,991 | 14,991 | 14,991 | |||||
Ending Balance at Sep. 30, 2022 | 2,005,092 | 146,088 | (867,391) | 2,678,653 | 15,008 | (19,292) | 1,953,066 | 52,026 |
Beginning balance at Jun. 30, 2022 | 1,964,667 | 146,174 | (867,391) | 2,676,063 | (14,565) | (12,100) | 1,928,181 | 36,486 |
Comprehensive income | ||||||||
Net income | 43,595 | 29,571 | 29,571 | 14,024 | ||||
Foreign currency translation gain (loss), net | (7,134) | (7,124) | (7,124) | (10) | ||||
Pension adjustments, net | (68) | (68) | (68) | |||||
Contributions | 5,472 | 5,472 | ||||||
Distributions | (3,946) | (3,946) | ||||||
Issuance of equity securities, net of retirements | (175) | 9 | (186) | 2 | (175) | |||
Repurchases of common stock | (3,952) | (95) | (3,857) | (3,952) | ||||
Stock-based compensation | 6,633 | 6,633 | 6,633 | |||||
Ending Balance at Sep. 30, 2022 | 2,005,092 | 146,088 | (867,391) | 2,678,653 | 15,008 | (19,292) | 1,953,066 | 52,026 |
Beginning balance at Dec. 31, 2022 | 2,095,935 | 146,132 | (844,936) | 2,717,134 | 43,089 | (17,849) | 2,043,570 | 52,365 |
Comprehensive income | ||||||||
Net income | 149,858 | 116,241 | 116,241 | 33,617 | ||||
Foreign currency translation gain (loss), net | 1,046 | 1,046 | 1,046 | |||||
Pension adjustments, net | 6 | 6 | 6 | |||||
Contributions | 1,537 | 1,537 | ||||||
Distributions | (12,156) | (12,156) | ||||||
Issuance of equity securities, net of retirements | (3,999) | 371 | (3,985) | (385) | (3,999) | |||
Repurchases of common stock | (8,000) | (185) | (7,815) | (8,000) | ||||
Stock-based compensation | 23,872 | 23,872 | 23,872 | |||||
Ending Balance at Sep. 30, 2023 | 2,248,100 | 146,318 | (844,936) | 2,729,206 | 158,945 | (16,797) | 2,172,736 | 75,364 |
Beginning balance at Jun. 30, 2023 | 2,190,765 | 146,312 | (844,936) | 2,721,402 | 111,513 | (14,860) | 2,119,431 | 71,334 |
Comprehensive income | ||||||||
Net income | 59,811 | 47,447 | 47,447 | 12,364 | ||||
Foreign currency translation gain (loss), net | (1,929) | (1,926) | (1,926) | (3) | ||||
Pension adjustments, net | (11) | (11) | (11) | |||||
Contributions | 1,337 | 1,337 | ||||||
Distributions | (9,669) | (9,669) | ||||||
Issuance of equity securities, net of retirements | (99) | 6 | (90) | (15) | (99) | |||
Stock-based compensation | 7,894 | 7,894 | 7,894 | |||||
Ending Balance at Sep. 30, 2023 | $ 2,248,100 | $ 146,318 | $ (844,936) | $ 2,729,206 | $ 158,945 | $ (16,797) | $ 2,172,736 | $ 75,364 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 47,447 | $ 29,571 | $ 116,241 | $ 68,533 |
Insider Trading Policies and Pr
Insider Trading Policies and Procedures | 9 Months Ended |
Sep. 30, 2023 | |
Insider Trading Policies and Procedures [Line Items] | |
Insider Trading Policies and Procedures Adopted | true |
Description of Operations
Description of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Description Of Operations Disclosure [Abstract] | |
Description of Operations | 1. Description of Operations Organization Parsons Corporation, a Delaware corporation, and its subsidiaries (collectively, the “Company”) provide sophisticated design, engineering and technical services, and smart and agile software to the United States federal government and Critical Infrastructure customers worldwide. The Company performs work in various foreign countries through local subsidiaries, joint ventures and foreign offices maintained to carry out specific projects. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | 2. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the interim period reporting requirements of Form 10-Q. They do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with our consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full year or for future years. This Quarterly Report on Form 10-Q includes the accounts of Parsons Corporation and its subsidiaries and affiliates which it controls. Interests in joint ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts a significant influence, the Company applies the equity method of accounting (see “Note 14 – Investments in and Advances to Joint Ventures" for further discussion). Intercompany accounts and transactions are eliminated in consolidation. Certain amounts may not foot due to rounding. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the costs to complete contracts and transaction price; determination of self-insurance reserves; useful lives of property and equipment and intangible assets; valuation of goodwill, intangible assets and net assets acquired from business acquisitions; valuation of deferred income tax assets and uncertain tax positions, among others. 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 Policies” in the notes to our consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2022 , for a discussion of the significant estimates and assumptions affecting our consolidated financial statements. Estimates of costs to complete contracts are continually evaluated as work progresses and are revised when necessary. When a change in estimate is determined to have an impact on contract profit, the Company records a positive or negative adjustment to the consolidated statement of income. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | 3. New Accounting Pronouncements In the first quarter of 2022 , the Company early adopted ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The new guidance requires that the approach of ASC 606, Revenue from Contracts with Customers, should be used to measure an acquired revenue contract in a business combination. This guidance is to be applied (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The early adoption of ASU 2021-08 did no t have a material impact on the consolidated financial statements. During July 2023, the Financial Accounting Standards Board Issued ASU No. 2023-03. ASU No. 2023-03 incorporates, into certain accounting standards, amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revisions of Regulation S-X: Income or Loss Applicable to Common Stock. These rules are effective immediately. The significant amendment in this guidance impacting the Company involves share-based payment awards granted when the Company is in possession of material non-public information to which the market is likely to react positively when the information is announced. For each award granted, the Company needs to determine, at the date of the grant, whether positive material non-public information is currently available (or would be available) to the issuer that would be considered by a marketplace participant in estimating the expected volatility. If positive material non-public information is available, the Company should consider the future events in estimating expected volatility. ASU No. 2023-03 had no impact on the Company's consolidated financial statements as of and for the periods ending September 30, 2023. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions Sealing Technologies, Inc. On August 23, 2023, the Company acquired a 100 % ownership interest in Sealing Technologies, Inc (“SealingTech”), a privately-owned company, for $ 181.7 million in cash and up to an additional $ 25 million in the event an earn out revenue target is exceeded. The Company borrowed $ 175 million under the Credit Agreement, as described in “Note 10 – Debt and Credit Facilities”, to fund the acquisition. Headquartered in Maryland, SealingTech expands Parsons’ customer base across the Department of Defense and Intelligence Community, and further enhances the company’s capabilities in defensive cyber operations; integrated mission-solutions powered by artificial intelligence (AI) and machine learning (ML); edge computing and edge access modernization; critical infrastructure protection; and secure data management . In connection with this acquisition, the Company recognized $ 3.1 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the three and nine months ended September 30, 2023, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. The Company has agreed to pay the selling shareholders up to an additional $ 25 million in the event an earn out revenue target of $ 110 million is exceeded during the fiscal year ended December 31, 2024. The earn out payment due and payable by the Company to the selling shareholders shall be equal to (i) five-tenths ( 0.5 ), multiplied by (ii) the difference of (A) the actual earn out revenue minus (B) the earn out revenue target; provided, however, that in no event shall the earn out payment exceed $ 25 million. In the event that the earn out revenue is less than or equal to the earn out revenue target, the earn out payment shall be zero . The earn out payment, if any, shall be paid by the Company to the selling shareholders within 15 days following the date the earn out statement becomes final and binding on both parties. The following table summarizes the acquisition date fair value of the purchase consideration transferred (in thousands): Amount Cash paid at closing $ 181,690 Fair value of contingent consideration to be achieved 3,443 Total purchase price $ 185,133 Changes in the fair value of contingent consideration, when they occur, are recorded in the consolidated statements of income within “Selling, general and administrative expense” . The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the preliminary purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 8,133 Accounts receivable 17,889 Contract assets 2,960 Other current assets 1,379 Property and equipment 1,635 Right of use asset 1,288 Deferred tax assets 686 Goodwill 106,241 Intangible assets 59,900 Accounts payable ( 15,987 ) Accrued expenses and other current liabilities ( 2,377 ) Contract liabilities ( 493 ) Short-term lease liabilities ( 540 ) Deferred tax liabilities ( 330 ) Long-term lease liabilities ( 551 ) Net assets acquired $ 179,833 Of the total purchase price, the following values were preliminarily assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships $ 31,400 8 Backlog 18,500 8 Developed technologies 8,000 5 Other 2,000 1 to 3 Amortization expense of $ 1.5 million related to these intangible assets was recorded for the three and nine months ended September 30, 2023. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. The entire value of goodwill is deductible for tax purposes. The amount of revenue generated by SealingTech and included within consolidated revenues is $ 18.4 million for the three and nine months ended September 30, 2023. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition. The Company is still in the process of finalizing its valuation of the net assets acquired. Supplemental Pro Forma Information (Unaudited) Supplemental information of unaudited pro forma operating results assuming the SealingTech acquisition had been consummated as of the beginning of fiscal year 2022 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,450,376 $ 1,154,603 $ 4,030,873 $ 3,134,609 Pro forma Net Income including noncontrolling interests 66,010 42,820 $ 161,544 $ 77,218 IPKeys Power Partners On April 13, 2023, the Company entered into a merger agreement to acquire a 100 % ownership interest in IPKeys Power Partners (“IPKeys”), a privately-owned company, for $ 43.0 million in cash. The merger brings IPKeys' established customer base, expanding Parsons' presence in two rapidly growing end markets: grid modernization and cyber resiliency for critical infrastructure. Headquartered in Tinton Falls, New Jersey, IPKeys is a trusted provider of enterprise software platform solutions that is actively delivering cyber and operational security to hundreds of electric, water, and gas utilities across North America. The acquisition was entirely funded by cash on-hand. In connection with this acquisition, the Company recognized $ 0.1 million and $ 0.6 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the three and nine months ended September 30, 2023, respectively, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the preliminary purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 126 Accounts receivable 3,937 Contract assets 834 Other current assets 422 Property and equipment 86 Right of use asset 129 Other noncurrent assets 56 Goodwill 24,126 Intangible assets 23,000 Accounts payable ( 541 ) Accrued expenses and other current liabilities ( 1,768 ) Contract liabilities ( 1,936 ) Deferred tax liabilities ( 5,432 ) Net assets acquired $ 43,039 Of the total purchase price, the following values were preliminarily assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships (1) $ 15,900 16 Developed technologies 7,000 11 Other $ 100 1 (1) The acquired business is a SaaS commercial business. Backlog for this type of business is included as customer relationships. Amortization expense of $ 0.5 million and $ 0.9 million related to these intangible assets was recorded for the three and nine months ended September 30, 2023 , respectively. The entire value of goodwill was assigned to the Critical Infrastructure reporting unit and represents synergies expected to be realized from this business combination. $ 1.0 million of goodwill is deductible for tax purposes. The amount of revenue generated by IPKeys and included within consolidated revenues is $ 3.5 million and $ 6.1 million for the three and nine months ended September 30, 2023, respectively. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition. The Company is still in the process of finalizing its valuation of the net assets acquired. Supplemental Pro Forma Information (Unaudited) Supplemental information of unaudited pro forma operating results assuming the IPKeys acquisition had been consummated as of the beginning of fiscal year 2022 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,418,571 $ 1,137,381 $ 3,951,378 $ 3,101,246 Pro forma Net Income including noncontrolling interests 60,187 42,907 $ 151,917 $ 87,427 Xator Corporation On May 31, 2022, the Company acquired a 100 % ownership interest in Xator Corporation (“Xator”), a privately-owned company, for $ 387.5 million in cash. The Company borrowed $ 300 million under the Credit Agreement, as described in “Note 10 – Debt and Credit Facilities”, to partially fund the acquisition. Xator expands Parsons’ customer base and brings differentiated technical capabilities in critical infrastructure protection, counter-unmanned aircraft systems (cUAS), intelligence and cyber solutions, biometrics, and global threat assessment and operations. In connection with this acquisition, the Company recognized $ 7.7 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the year ended December 31, 2022, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 8,935 Accounts receivable 7,393 Contract assets 24,332 Prepaid expenses and other current assets 3,615 Property and equipment 1,699 Right of use assets, operating leases 7,517 Goodwill 257,934 Investments in and advances to unconsolidated joint ventures 698 Intangible assets 123,500 Other noncurrent assets 9,156 Accounts payable ( 6,626 ) Accrued expenses and other current liabilities ( 31,309 ) Contract liabilities ( 2,631 ) Short-term lease liabilities, operating leases ( 2,371 ) Long-term lease liabilities, operating leases ( 5,146 ) Other long-term liabilities ( 9,156 ) Net assets acquired $ 387,540 Of the total purchase price, the following values were assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships $ 37,000 15 Backlog 81,000 6 Trade name 4,000 1 Developed technologies 1,000 3 Non-compete agreements $ 500 3 Amortization expense of $ 4.1 million and $ 14.0 million related to these intangible assets was recorded for the three and nine months ended September 30, 2023 , respectively and $ 4.9 million and $ 6.6 million for both the three and nine months ended September 30, 2022, respectively. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. Goodwill in its entirety is deductible for tax purposes. The amount of revenue generated by Xator and included within consolidated revenues was $ 70.4 million and $ 91.2 million for the three and nine months ended September 30, 2022. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition. Supplemental Pro Forma Information (Unaudited) Supplemental information of unaudited pro forma operating results assuming the Xator acquisition had been consummated as of the beginning of fiscal year 2021 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,199,336 Pro forma Net Income including noncontrolling interests 60,374 43,970 154,275 102,859 |
Contracts with Customers
Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Contracts with Customers | 5. Contracts with Customers Disaggregation of Revenue The Company’s contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggregated by contract type (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Fixed-Price $ 452,606 $ 334,853 $ 1,233,712 $ 854,835 Time-and-Materials 355,689 302,236 998,037 836,881 Cost-Plus 610,276 497,281 1,716,774 1,400,444 Total $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 See “Note 18 – Segments Information” for the Company’s revenues by business lines. Contract Assets and Contract Liabilities Contract assets and contract liabilities balances at September 30, 2023 and December 31, 2022 were as follows (in thousands): September 30, 2023 December 31, 2022 $ change % change Contract assets $ 756,630 $ 634,033 $ 122,597 19.3 % Contract liabilities 277,249 213,064 64,185 30.1 % Net contract assets (liabilities) (1) $ 479,381 $ 420,969 $ 58,412 13.9 % (1) Total contract retentions included in net contract assets (liabilities) were $ 73.7 million as of September 30, 2023, of which $ 34.7 million are not expected to be paid in the next 12 months. Total contract retentions included in net contract assets (liabilities) were $ 73.5 million as of December 31, 2022. Contract assets at September 30, 2023 and December 31, 2022 include $ 105.6 million and $ 95.7 million , respectively, related to net claim recovery estimates. For the three and nine months ended September 30, 2023 and September 30, 2022 , there were no material losses recognized related to the collectability of claims, unapproved change orders, and requests for equitable adjustment. During the three months ended September 30, 2023 and September 30, 2022 , the Company recognized revenue of $ 8.9 million and $ 10.1 million, respectively, and $ 116.6 million and $ 91.8 million during the nine months ended September 30, 2023 and September 30, 2022, respectively, that was included in the corresponding contract liability balances at December 31, 2022 and December 31, 2021 , respectively. Certain changes in contract assets and contract liabilities consisted of the following: September 30, 2023 December 31, 2022 Acquired contract assets $ 2,729 $ 25,397 Acquired contract liabilities 2,980 2,080 There was no significant impairment of contract assets recognized during the nine months ended September 30, 2023 and September 30, 2022. Revisions in estimates, such as changes in estimated claims or incentives, related to performance obligations partially satisfied in previous periods that individually had an impact of $ 5 million or more on revenue resulted in the following changes in revenue: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue impact, net $ - $ - $ 4,748 $ - During the nine-month period ended September 30, 2023, there was a change in estimate to direct costs of contracts related to a write-down on a contract in the Critical Infrastructure segment. This change in estimate combined with changes to estimates to revenue resulted in a net decrease of $ 3.1 million to operating income, $ 2.3 million to net income and $ 0.02 to diluted earnings per share for the nine months ended September 30, 2023. Accounts Receivable, net Accounts receivable, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): 2023 2022 Billed $ 587,160 $ 502,411 Unbilled 323,592 218,945 Total accounts receivable, gross 910,752 721,356 Allowance for doubtful accounts ( 4,011 ) ( 4,011 ) Total accounts receivable, net $ 906,741 $ 717,345 Billed accounts receivable represents amounts billed to clients that have not been collected. Unbilled accounts receivable represents amounts where the Company has a present contractual right to bill but an invoice has not been issued to the customer at the period-end date. The allowance for doubtful accounts was determined based on consideration of trends in actual and forecasted credit quality of clients, including delinquency and payment history, type of client, such as a government agency or commercial sector client, and general economic conditions and particular industry conditions that may affect a client’s ability to pay. Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations (“RUPO”) as of September 30, 2023 represent a measure of the total dollar value of work to be performed on contracts awarded and in-progress. The Company had $ 6.2 billion in RUPO as of September 30, 2023. RUPO will increase with awards of new contracts and decrease as the Company performs work and recognizes revenue on existing contracts. Projects are included within RUPO at such time the project is awarded and agreement on contract terms has been reached. The difference between RUPO and backlog relates to unexercised option years that are included within backlog and the value of Indefinite Delivery/Indefinite Quantity (“IDIQ”) contracts included in backlog for which delivery orders have not been issued. RUPO is comprised of: (a) original transaction price, (b) change orders for which written confirmations from our customers have been received, (c) pending change orders for which the Company expects to receive confirmations in the ordinary course of business, and (d) claim amounts that the Company has made against customers for which it has determined that it has a legal basis under existing contractual arrangements and a significant reversal of revenue is not probable, less revenue recognized to-date. The Company expects to satisfy its RUPO as of September 30, 2023 over the following periods (in thousands): Period RUPO Will Be Satisfied Within One Year Within One to Two Years Thereafter Federal Solutions $ 1,620,465 $ 335,848 $ 240,563 Critical Infrastructure 1,893,315 1,076,331 1,011,917 Total $ 3,513,780 $ 1,412,179 $ 1,252,480 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 6. Leases The Company has operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment. Our leases have remaining lease terms of one to nine years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases after the third year . The components of lease costs for the three and nine months ended September 30, 2023 and September 30, 2022 are as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating lease cost $ 16,885 $ 16,299 $ 50,639 $ 49,049 Short-term lease cost 2,823 3,858 9,882 10,948 Amortization of right-of-use assets 718 571 1,904 1,721 Interest on lease liabilities 73 24 171 67 Sublease income ( 1,186 ) ( 1,318 ) ( 3,549 ) ( 3,321 ) Total lease cost $ 19,313 $ 19,434 $ 59,047 $ 58,464 Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and September 30, 2022 is as follows (in thousands): Nine Months Ended September 30, 2023 September 30, 2022 Operating cash flows for operating leases $ 53,040 $ 51,988 Operating cash flows for finance leases 171 67 Financing cash flows from finance leases 1,865 1,580 Right-of-use assets obtained in exchange for new operating lease liabilities 48,430 15,709 Right-of-use assets obtained in exchange for new finance lease liabilities $ 4,470 $ 1,156 Supplemental balance sheet and other information related to leases as of September 30, 2023 and December 31, 2022 are as follows (in thousands): September 30, 2023 December 31, 2022 Operating Leases: Right-of-use assets $ 158,400 $ 155,090 Lease liabilities: Current 56,930 59,144 Long-term 119,281 111,417 Total operating lease liabilities $ 176,211 $ 170,561 Finance Leases: Other noncurrent assets $ 6,559 $ 3,965 Accrued expenses and other current liabilities $ 2,358 $ 1,746 Other long-term liabilities $ 4,198 $ 2,246 Weighted Average Remaining Lease Term: Operating leases 4.0 years 3.6 years Finance leases 3.0 years 2.6 years Weighted Average Discount Rate: Operating leases 4.0 % 3.4 % Finance leases 4.2 % 2.8 % As of September 30, 2023 , the Company has no operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with the Company’s operating and finance lease liabilities as of September 30, 2023 is as follows (in thousands): Operating Leases Finance Leases 2023 (remaining) $ 17,404 $ 673 2024 58,599 2,518 2025 45,042 2,056 2026 28,876 1,418 2027 16,536 314 Thereafter 24,290 4 Total lease payments 190,747 6,983 Less: imputed interest ( 14,536 ) ( 427 ) Total present value of lease liabilities $ 176,211 $ 6,556 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following table summarizes the changes in the carrying value of goodwill by reporting segment from December 31, 2022 to September 30, 2023 (in thousands): December 31, 2022 Acquisitions Foreign Exchange September 30, 2023 Federal Solutions $ 1,591,563 $ 110,984 $ - $ 1,702,547 Critical Infrastructure 70,287 24,126 370 94,783 Total $ 1,661,850 $ 135,110 $ 370 $ 1,797,330 The Company performed a qualitative triggering analysis and determined there was no triggering event indicating a potential impairment to the carrying value of its goodwill at September 30, 2023 and concluded there has no t been an impairment. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. Intangible Assets The gross amount and accumulated amortization of intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets are as follows (in thousands except for years): September 30, 2023 December 31, 2022 Weighted Gross Accumulated Net Gross Accumulated Net Amortization (in years) Backlog $ 160,700 $ ( 71,713 ) $ 88,987 $ 142,200 $ ( 45,903 ) $ 96,297 4.3 Customer relationships 345,620 ( 174,196 ) 171,424 293,730 ( 146,032 ) 147,698 9.0 Leases 120 ( 101 ) 19 120 ( 87 ) 33 1.0 Developed technology 31,600 ( 14,145 ) 17,455 16,600 ( 11,560 ) 5,040 5.5 Trade name 1,200 ( 267 ) 933 5,000 ( 3,083 ) 1,917 1.1 Non-compete agreements 2,150 ( 1,587 ) 563 3,350 ( 2,074 ) 1,276 3.3 In process research and development 1,800 - 1,800 1,800 - 1,800 n/a Other intangibles 1,175 ( 258 ) 917 275 ( 209 ) 66 3.5 Total intangible assets $ 544,365 $ ( 262,267 ) $ 282,098 $ 463,075 $ ( 208,948 ) $ 254,127 The aggregate amortization expense of intangible assets for the three months ended September 30, 2023 and September 30, 2022 was $ 18.8 million and $ 19.1 million , respectively, and $ 54.9 million and $ 58.9 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. Estimated amortization expense for the remainder of the current fiscal year, each of the next four years and beyond is as follows (in thousands): September 30, 2023 2023 $ 18,505 2024 45,773 2025 39,599 2026 35,880 2027 34,766 Thereafter 105,775 Total $ 280,298 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 9. Property and Equipment, Net Property and equipment consisted of the following at September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Useful life Buildings and leasehold improvements $ 105,192 $ 103,071 1 - 15 Furniture and equipment 88,856 85,088 3 - 10 Computer systems and equipment 174,215 152,511 3 - 10 Construction equipment 6,389 5,271 5 - 7 Construction in progress 15,331 21,952 389,983 367,893 Accumulated depreciation ( 290,639 ) ( 271,843 ) Property and equipment, net $ 99,344 $ 96,050 Depreciation expense for the three months ended September 30, 2023 and September 30, 2022 was $ 10.2 million and $ 9.7 million , respectively, and $ 29.1 million and $ 29.3 million for the nine months ended September 30, 2023 and September 30, 2022 , respectively. |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | 10. Debt and Credit Facilities Debt consisted of the following (in thousands): September 30, 2023 December 31, 2022 Long-Term Debt: Delayed draw term loan $ 350,000 $ 350,000 Convertible senior notes 400,000 400,000 Revolving credit facility 75,000 - Debt issuance costs ( 4,634 ) ( 6,395 ) Total $ 820,366 $ 743,605 Delayed Draw Term Loan In September 2022 , the Company entered into a $ 350 million unsecured Delayed Draw Term Loan with an increase option of up to $ 150 million (the “2022 Delayed Draw Term Loan”). Proceeds of the 2022 Delayed Draw Term Loan Agreement may be used (a) to pay off in full, or partially payoff, the Company’s existing Senior Notes, (b) to prepay revolving loans outstanding under the Revolving Credit Agreement (as defined below), or (c) for working capital, capital expenditures and other lawful corporate purposes. The Company drew $ 350.0 million from the 2022 Delayed Draw Term Loan in November 2022. The Company incurred $ 0.9 million of debt issuance costs in connection with the delayed draw term loan as of December 31, 2022. These costs are presented as a direct deduction from long-term debt on the face of the balance sheet. Interest expense related to the 2022 Delayed Draw Term Loan was $ 5.9 million and $ 16.6 million for the three and nine months ended September 30, 2023 , respectively There were no amounts outstanding under the 2022 Delayed Draw Term Loan as of September 30, 2022. The amortization of debt issuance costs and interest expense is recorded in “Interest expense” on the consolidated statements of income. As of September 30, 2023 and December 31, 2022, there was $ 350.0 million outstanding under the 2022 Delayed Draw Term Loan. The interest rates on September 30, 2023 and December 31, 2022 were 6.6 % and 5.6 % , respectively. The 2022 Delayed Draw Term Loan has a three-year maturity and permits the Company to borrow in U.S. dollars. The 2022 Delayed Draw Term Loan does not require any amortization payments by the Company. Depending on the Company’s consolidated leverage ratio (or debt rating after such time as the Company has such rating), borrowings under the 2022 Delayed Draw Term Loan Agreement will bear interest at either an adjusted Term SOFR benchmark rate plus a margin between 0.875 % and 1.500 % or a base rate plus a margin of between 0 % and 0.500 % and will initially bear interest at the middle of this range. The Company will pay a ticking fee on unused term loan commitments at a rate of 0.175 % commencing with the date that is ninety (90) days after the Closing Date. Amounts outstanding under the 2022 Delayed Draw Term Loan Agreement may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of benchmark rate loans. Convertible Senior Notes In August 2020, the Company issued an aggregate $ 400.0 million of 0.25 % Convertible Senior Notes due 2025, including the exercise of a $ 50.0 million initial purchasers’ option. The Company received proceeds from the issuance and sale of the Convertible Senior Notes of $ 389.7 million, net of $ 10.3 million of transaction fees and other third-party offering expenses. The Convertible Senior Notes accrue interest at a rate of 0.25 % per annum, payable semi-annually on February 15 and August 15 of each year beginning on February 15, 2021 , and will mature on August 15, 2025 , unless earlier repurchased, redeemed or converted. The Convertible Senior Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries Each $ 1,000 of principal of the Notes will initially be convertible into 22.2913 shares of our common stock, which is equivalent to an initial conversion price of $ 44.86 per share, subject to adjustment upon the occurrence of specified events. On or after March 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Senior Notes, holders may convert all or a portion of their Convertible Senior Notes, regardless of the conditions below. Prior to the close of business on the business day immediately preceding March 15, 2025, the Notes will be convertible at the option of the holders thereof only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2021, if the last reported sale price of the Company’s common stock for at least 20 trading days, whether or not consecutive, during a period of 30 consecutive trading days ending on, and including the last trading day of the immediately preceding calendar quarter, is greater than or equal to 130 % of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price per $ 1,000 principal amount of Convertible Senior Notes for such trading day was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; • if the Company calls such Convertible Senior Notes for redemption; or • upon the occurrence of specified corporate events described in the Indenture. The Company may redeem all or any portion of the Convertible Senior Notes for cash, at its option, on or after August 21, 2023 and before the 51 st scheduled trading day immediately before the maturity date at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for a specified period of time. In addition, calling any Convertible Senior Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Convertible Senior Note, in which case the conversion rate applicable to the conversion of that Convertible Senior Note will be increased in certain circumstances if it is converted after it is called for redemption. Upon the occurrence of a fundamental change prior to the maturity date of the Convertible Senior Notes, holders of the Convertible Senior Notes may require the Company to repurchase all or a portion of the Convertible Senior Notes for cash at a price equal to 100 % of the principal amount of the Convertible Senior Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Upon conversion, the Company may settle the Convertible Senior Notes for cash, shares of the Company’s common stock, or a combination thereof, at the Company’s option. If the Company satisfies its conversion obligation solely in cash or through payment and delivery of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of common stock due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 50-trading day observation period. The Company recognized interest expense of approximately $ 0.7 million for both the three months ended September 30, 2023 and September 30, 2022 and $ 2.3 million and $ 2.2 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022 , the carrying value of the Notes was $ 400.0 million. Revolving Credit Facility In June 2021 , the Company entered into a $ 650 million unsecured revolving credit facility (the “Credit Agreement”). The Company incurred $ 1.9 million of costs in connection with this Credit Agreement. The 2021 Credit Agreement replaced an existing Fifth Amended and Restated Credit Agreement dated as of November 15, 2017. Under the new agreement, the Company’s revolving credit facility was increased from $ 550 million to $ 650 million. The credit facility has a five-year maturity, which may be extended up to two times for periods determined by the Company and the applicable extending lenders, and permits the Company to borrow in U.S. dollars, certain specified foreign currencies, and each other currency that may be approved in accordance with the 2021 Facility. The borrowings under the Credit Agreement bear interest at either the Term SOFR rate plus a margin between 1.0 % and 1.625 % or a base rate (as defined in the Credit Agreement) plus a margin of between 0 % and 0.625 %. The rates on September 30, 2023 and December 31, 2022 were 6.7 % and 5.7 %, respectively. Borrowings under this Credit Agreement are guaranteed by certain Company operating subsidiaries. Letters of credit commitments outstanding under this agreement aggregated to $ 43.9 million and $ 44.5 million at March 31, 2023 and December 31, 2022, respectively, which reduced borrowing limits available to the Company. Interest expense related to the Credit Agreement was $ 1.5 million and $ 2.5 million for the three months ended September 30, 2023 and September 30, 2022, respectively and $ 2.0 million and $ 3.4 million for the nine months ended September 30, 2023 and September 30, 2022 , respectively. There was $ 75 million outstanding under the Credit Agreement at September 30, 2023. The Credit Agreement includes various covenants, including restrictions on indebtedness, liens, acquisitions, investments or dispositions, payment of dividends and maintenance of certain financial ratios and conditions. The Company was in compliance with these covenants at September 30, 2023 and December 31, 2022. Letters of Credit The Company also has 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 approximately $ 311.8 million and $ 222.5 million at September 30, 2023 and December 31, 2022, respectively. Convertible Note Hedge and Warrant Transactions In connection with the sale of the Convertible Senior Notes, the Company purchased a bond hedge designed to mitigate the potential dilution from the conversion of the Convertible Senior Notes. Under the five-year term of the bond hedge, upon a conversion of the bonds, the Company will receive the number of shares of common stock equal to the remaining common stock deliverable upon conversion of the Convertible Senior Notes if the conversion value exceeds the principal amount of the Notes. The aggregate number of shares that the Company could be obligated to issue upon conversion of the Convertible Senior Notes is approximately 8.9 million shares. The cost of the convertible note hedge transactions was $ 55.0 million. The cost of the convertible note hedge was partially offset by the Company’s sale of warrants to acquire approximately 8.9 million shares of the Company’s common stock. The warrants were initially exercisable at a price of at least $ 66.46 per share and are subject to customary adjustments upon the occurrence of certain events, such as the payment of dividends. The Company received $ 13.8 million in cash proceeds from the sales of these warrants. The bond hedge and warrant transactions effectively increased the conversion price associated with the Convertible Senior Notes during the term of these transactions from 35 %, or $ 44.86 , to 100 %, or $ 66.46 , at their issuance, thereby reducing the dilutive economic effect to shareholders upon actual conversion. The bond hedges and warrants are indexed to, and potentially settled in, shares of the Company’s common stock. The net cost of $ 41.2 million for the purchase of the bond hedges and sale of the warrants was recorded as a reduction to additional paid-in capital in the consolidated balance sheets. At issuance, the Company recorded a deferred tax liability of $ 16.2 million related to the Convertible Senior Notes debt discount and the capitalized debt issuance costs. The Company also recorded a deferred tax asset of $ 16.5 million related to the convertible note hedge transactions and the tax basis of the capitalized debt issuance costs through additional paid-in capital. The deferred tax liability and deferred tax asset were included net in “Deferred tax assets” on the consolidated balance sheets. Upon adoption of ASU 2020-06, the Company reversed the deferred tax liability of $ 13.9 million that the Company had recorded at issuance related to the Convertible Senior Note debt discount and recorded an additional deferred tax liability of $ 0.4 million related to the capitalized debt issuance costs. In addition, the Company recorded a $ 0.9 million adjustment to the deferred tax asset through retained earnings related to the tax effect of book accretion recorded in 2020 and reversed upon adoption. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company’s effective tax rate was 20.3 % and 24.0 % and income tax expense was $ 15.2 million and $ 13.8 million for the three months ended September 30, 2023 and September 30, 2022, respectively. The change in the effective tax rate was due primarily to tax benefits related to increases in the foreign-derived intangible income (FDII) deduction and a change in jurisdictional mix of earnings, partially offset by an increase in foreign withholding taxes. The Company’s effective tax rate was 21.9 % and 23.5 % and income tax expense was $ 41.9 million and $ 27.6 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The most significant items contributing to the change in the effective tax rate are the tax benefits related to increases in the FDII deduction and change in jurisdictional mix of earnings, partially offset by an increase in foreign withholding taxes. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21 % for the three and nine months ended September 30, 2023 primarily relates to state income taxes and foreign withholding taxes, partially offset by benefits related to untaxed income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and the federal research tax credit. As of September 30, 2023, the Company’s deferred tax assets were subject to a valuation allowance of $ 25.7 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include: the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets. As of September 30, 2023 and December 31, 2022, the liability for income taxes associated with uncertain tax positions was $ 25.1 million and $ 22.8 million, respectively. It is reasonably possible that the Company may realize a decrease in our unrecognized tax benefits of approximately $ 1.4 million during the next 12 months as a result of concluding various tax audits and closing tax years. Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. It is reasonably possible that certain audits may conclude in the next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. However, it is not currently possible to estimate the amount, if any, of such change. On July 21, 2023, the IRS issued Notice 2023-55 which provides guidance to taxpayers in determining whether a foreign tax is eligible for a U.S. foreign tax credit for tax years 2022 and 2023, specifically delaying until 2024 the application of unfavorable foreign tax credit regulations that were originally issued late last year. The Company does not expect this Notice to have a material impact to its income tax positions. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 12. Contingencies The Company is subject to certain lawsuits, claims and assessments that arise in the ordinary course of business. Additionally, the Company has been named as a defendant in lawsuits alleging personal injuries as a result of contact with asbestos products at various project sites. Management believes that any significant costs relating to these claims will be reimbursed by applicable insurance and, although there can be no assurance that these matters will be resolved favorably, management believes that the ultimate resolution of any of these claims will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. A liability is recorded when it is both probable that a loss has been incurred and the amount of loss or range of loss can be reasonably estimated. When using a range of loss estimate, the Company records the liability using the low end of the range unless some amount within the range of loss appears at that time to be a better estimate than any other amount in the range. The Company records a corresponding receivable for costs covered under its insurance policies. Management judgment is required to determine the outcome and the estimated amount of a loss related to such matters. Management believes that there are no claims or assessments outstanding which would materially affect the consolidated results of operations or the Company’s financial position. In September 2015, a former Parsons employee filed an action in the United States District Court for the Northern District of Alabama against us as a qui tam relator on behalf of the United States (the “Relator”) alleging violation of the False Claims Act. The plaintiff alleges that, as a result of these actions, the United States paid in excess of $ 1 million per month between February and September 2006 that it should have paid to another contractor, plus $ 2.9 million to acquire vehicles for the contractor defendant to perform its security services. The lawsuit sought (i) that we cease and desist from violating the False Claims Act, (ii) monetary damages equal to three times the amount of damages that the United States has sustained because of our alleged violations, plus a civil penalty of not less than $ 5,500 and not more than $ 11,000 for each alleged violation of the False Claims Act, (iii) monetary damages equal to the maximum amount allowed pursuant to §3730(d) of the False Claims Act, and (iv) Relator’s costs for this action, including recovery of attorneys’ fees and costs incurred in the lawsuit. The United States government did not intervene in this matter as it is allowed to do so under the statute. Dispositive and/or pre-trail motions have been filed. A hearing date was held during the third quarter of 2023 on such motions; however, the court has not issued a ruling. Depending upon the court’s rulings upon such motions, a trial may be scheduled in 2023 or 2024. Federal government contracts are subject to audits, which are performed for the most part by the Defense Contract Audit Agency (“DCAA”). Audits by the DCAA and other agencies consist of reviews of our overhead rates, operating systems and cost proposals to ensure that we account for such costs in accordance with the Cost Accounting Standards (“CAS”). If the DCAA determines we have not accounted for such costs in accordance with the CAS, the DCAA may disallow these costs. The disallowance of such costs may result in a reduction of revenue and additional liability for the Company. Historically, the Company has not experienced any material disallowed costs as a result of government audits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future. All audits of costs incurred on work performed through 2013 have been closed, and years thereafter remain open. Although there can be no assurance that these matters will be resolved favorably, management believes that their ultimate resolution will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows. |
Retirement Benefit Plan
Retirement Benefit Plan | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plan | 13. Retirement Benefit Plan The Company’s principal retirement benefit plan is the Parsons Employee Stock Ownership Plan (“ESOP”), a stock bonus plan, established in 1975 to cover eligible employees of the Company and certain affiliated companies. Contributions of treasury stock to the ESOP are made annually in amounts determined by the Company’s board of directors and are held in trust for the sole benefit of the participants. Shares allocated to a participant’s account are fully vested after three years of credited service, or in the event(s) of reaching age 65, death or disability while an active employee of the Company. As of September 30, 2023 and December 31, 2022, total shares of the Company’s common stock outstanding were 104,888,473 and 104,702,996 , respectively, of which 59,752,326 and 63,742,151 , respectively, were held by the ESOP. A participant’s interest in their ESOP account is redeemable upon certain events, including retirement, death, termination due to permanent disability, a severe financial hardship following termination of employment, certain conflicts of interest following termination of employment, or the exercise of diversification rights. Distributions from the ESOP of participants’ interests are made in the Company’s common stock based on quoted prices of a share of the Company’s common stock on the NYSE. A participant will be able to sell such shares of common stock in the market, subject to any requirements of the federal securities laws. Total ESOP contribution expense was $ 14.9 million and $ 15.4 million for the three months ended September 30, 2023 and September 30, 2022, respectively and $ 44.1 million and $ 42.0 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The expense is recorded in “Direct costs of contracts” and “Selling, general and administrative expense” in the consolidated statements of income. The fiscal 2023 ESOP contribution has not yet been made. The amount is currently included in accrued liabilities. |
Investments in and Advances to
Investments in and Advances to Joint Ventures | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in and Advances to Joint Ventures | 14. Investments in and Advances to Joint Ventures The Company participates in joint ventures to bid, negotiate and complete specific projects. The Company is required to consolidate these joint ventures if it holds the majority voting interest or if the Company meets the criteria under the consolidation model, as described below. The Company performs an analysis to determine whether its variable interests give the Company a controlling financial interest in a Variable Interest Entity (“VIE”) for which the Company is the primary beneficiary and should, therefore, be consolidated. Such analysis requires the Company to assess whether it has the power to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company analyzed all of its joint ventures and classified them into two groups: (1) joint ventures that must be consolidated because they are either not VIEs and the Company holds the majority voting interest, or because they are VIEs and the Company is the primary beneficiary; and (2) joint ventures that do not need to be consolidated because they are either not VIEs and the Company holds a minority voting interest, or because they are VIEs and the Company is not the primary beneficiary. Many of the Company’s joint venture agreements provide for capital calls to fund operations, as necessary; however, such funding is infrequent and is not anticipated to be material. Letters of credit outstanding described in “Note 10 – Debt and Credit Facilities” that relate to project ventures are $ 149.9 million and $ 106.8 million at September 30, 2023 and December 31, 2022. In the table below, aggregated financial information relating to the Company’s joint ventures is provided because their nature, risk and reward characteristics are similar. None of the Company’s current joint ventures that meet the characteristics of a VIE are individually significant to the consolidated financial statements. Consolidated Joint Ventures The following represents financial information for consolidated joint ventures included in the consolidated financial statements (in thousands): September 30, 2023 December 31, 2022 Current assets $ 418,854 $ 289,837 Noncurrent assets 11,637 9,961 Total assets 430,491 299,798 Current liabilities 278,168 194,701 Noncurrent liabilities 3,504 3,763 Total liabilities 281,672 198,464 Total joint venture equity $ 148,819 $ 101,334 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue $ 185,602 $ 130,344 $ 514,339 $ 333,967 Costs 160,423 101,882 445,829 289,485 Net income $ 25,179 $ 28,462 $ 68,510 $ 44,482 Net income attributable to noncontrolling interests $ 12,364 $ 14,024 $ 33,617 $ 21,685 The assets of the consolidated joint ventures are restricted for use only by the particular joint venture and are not available for the Company’s general operations. Unconsolidated Joint Ventures The Company accounts for its unconsolidated joint ventures using the equity method of accounting. Under this method, the Company recognizes its proportionate share of the net earnings of these joint ventures as “Equity in (losses) earnings of unconsolidated joint ventures” in the consolidated statements of income. The Company’s maximum exposure to loss as a result of its investments in unconsolidated joint ventures is typically limited to the aggregate of the carrying value of the investment and future funding commitments. The following represents the financial information of the Company’s unconsolidated joint ventures as presented in their unaudited financial statements (in thousands): September 30, 2023 December 31, 2022 Current assets $ 1,513,825 $ 1,610,246 Noncurrent assets 481,708 491,658 Total assets 1,995,533 2,101,904 Current liabilities 960,276 1,255,297 Noncurrent liabilities 503,705 468,056 Total liabilities 1,463,981 1,723,353 Total joint venture equity $ 531,552 $ 378,551 Investments in and advances to unconsolidated joint ventures $ 164,858 $ 107,425 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue $ 634,937 $ 782,880 $ 1,514,561 $ 1,762,420 Costs 581,041 774,030 1,474,991 1,711,555 Net income $ 53,896 $ 8,850 $ 39,570 $ 50,865 Equity in (losses) earnings of unconsolidated joint ventures $ 10,262 $ ( 974 ) $ 4,497 $ 10,237 The Company had net contributions to its unconsolidated joint ventures for the three and nine months ended September 30, 2023 of $ 36.1 million and $ 50.8 million , respectively and received net distributions from its unconsolidated joint ventures for the three and nine months ended September 30, 2022 of $ 13.2 million and $ 21.4 million , respectively. For the three ended September 30, 2023 , the Company recorded adjustments to equity in earnings of unconsolidated joint ventures of $ 5.1 million and for the nine months ended September 30, 2023 the Company recorded adjustments to equity in losses of unconsolidated joint ventures of $ 12.4 million on two unconsolidated joint ventures in the Critical Infrastructure segment, one from lower margin change orders in the first quarter offset in the current quarter by higher margin change orders and the other from write-offs in each of the three quarters ended September 30, 2023. For the three months ended September 30, 2023 , these adjustments increased operating income by $ 5.1 million, net income by $ 3.8 million and diluted earnings per share of $ 0.03 and for the nine months ended September 30, 2023 decreased operating income by $ 12.4 million, net income by $ 9.2 million and diluted earnings per share by $ 0.08 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. Related Party Transactions The Company often provides services to unconsolidated joint ventures and revenues include amounts related to recovering costs for these services. Revenues related to services the Company provided to unconsolidated joint ventures for the three months ended September 30, 2023 and September 30, 2022 were $ 57.3 million and $ 60.3 million , respectively and $ 164.8 million and $ 160.5 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. For the three months ended September 30, 2023 and September 30, 2022, the Company incurred $ 38.8 million and $ 42.1 million , respectively, and for the nine months ended September 30, 2023 and September 30, 2022 incurred $ 118.5 million and $ 113.8 million , respectively, of reimbursable costs. Amounts included in the consolidated balance sheets related to services the Company provided to unconsolidated joint ventures are as follows (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 41,043 $ 40,795 Contract assets 40,032 30,578 Contract liabilities 14,161 14,318 Amounts presented above for prior and comparable periods have been updated to reflect all unconsolidated joint ventures. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 16. Fair Value Measurements The authoritative guidance on fair value measurement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an “exit price”). At September 30, 2023 and December 31, 2022, the Company’s financial instruments include cash, cash equivalents, accounts receivable, accounts payable, debt, and other liabilities. The fair values of these financial instruments approximate their carrying values due to their short-term maturities. Investments measured at fair value are based on one or more of the following three valuation techniques: • Market approach —Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Cost approach —Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and • Income approach —Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing models and lattice models). In addition, the guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities; Level 2 - Pricing inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurements and unobservable. The Company's contingent consideration is categorized as Level 3 within the fair value hierarchy. Contingent consideration is recorded within other long-term liabilities in the Company's consolidated balance sheet as of September 30, 2023. Contingent consideration has been recorded at its fair values using the option pricing method prescribed in the earnout valuation guide published by The Appraisal Foundation. We considered three major risks associated with earnout, i.e. risk in the underlying metric, risk in the earnout structure, and counterparty credit risk. Our valuation model was based on the Black Scholes option pricing formula and major assumptions including SealingTech's fiscal year 2024 projected revenue, the revenue discount rate, the revenue volatility, and the Company's credit adjusted discount rate. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Refer to Notes to Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2022 for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 17. Earnings Per Share The following tables reconcile the denominator and numerator used to compute basic earnings per share (“EPS”) to the denominator and numerator used to compute diluted EPS for the three and nine months ended September 30, 2023 and September 30, 2022. Basic EPS is computed using the weighted average number of shares outstanding during the period and income available to shareholders. Diluted EPS is computed similar to basic EPS, except the income available to shareholders is adjusted to add back interest expense, after tax, related to the Convertible Senior Note, and the weighted average number of shares outstanding is adjusted to reflect the dilutive effects of stock-based awards and shares underlying the Convertible Senior Note. Convertible Senior Note dilution impact is calculated using the if-converted method. In connection with the offerings of the Notes, the Company entered into a convertible note hedge and warrants (see Note 10 Debt and Credit Facilities); however, the convertible note hedge is not considered when calculating dilutive shares given its impact is anti-dilutive. The impact of the bond hedge would offset the dilutive impact of the shares underlying the Convertible Senior Note. The warrants have a strike price above our average share price during the period and are out of the money and not included in the tables below. Dilutive potential common shares include, when circumstances require, shares the Company could be obligated to issue from its Convertible Senior Notes and warrants (see Note 10 for further discussion) and stock-based awards. Shares to be provided to the Company from its bond hedge purchased concurrently with the issuance of Convertible Senior Notes are anti-dilutive and are not included in its diluted shares. Anti-dilutive stock-based awards excluded from the calculation of earnings per share for the three months ended September 30, 2023 and September 30, 2022 were 2,911 and 2,449 , respectively and for the nine months ended September 30, 2023 and September 30, 2022 were 3,284 and 11,564 , respectively. The weighted average number of shares used to compute basic and diluted EPS were: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Basic weighted average number of shares outstanding 104,970,645 103,608,135 104,894,448 103,684,048 Stock-based awards 1,177,894 918,090 1,020,082 746,702 Convertible senior notes 8,916,530 8,916,530 8,916,530 8,916,530 Diluted weighted average number of shares outstanding 115,065,069 113,442,755 114,831,060 113,347,280 The net income available to shareholders to compute basic and diluted EPS were (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income attributable to Parsons Corporation $ 47,447 $ 29,571 116,241 68,533 Convertible senior notes if-converted method interest adjustment 559 545 1,665 1,627 Diluted net income attributable to Parsons Corporation $ 48,006 $ 30,116 117,906 70,160 Share Repurchases In August 2021, the Company’s Board of Directors authorized a stock repurchase program to repurchase up to $ 100.0 million of shares of Common stock. Repurchases under this stock repurchase program commenced on August 12, 2021 . Any and all shares of Common Stock purchased by the Company pursuant to the program shall be retired upon their acquisition and shall not become treasury shares but instead shall resume the status of authorized but unissued shares of Common Stock. The timing, amount and manner of share repurchases may depend upon market conditions and economic circumstances, availability of investment opportunities, the availability and costs of financing, the market price of the Company's common stock, other uses of capital and other factors. There were no share repurchases during the three months ended September 30, 2023 The table below presents information on this repurchase program: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Total shares repurchased - 95,413 185,475 522,501 Total shares retired - 95,413 185,475 522,501 Average price paid per share $ - $ 41.42 $ 43.13 $ 37.32 As of September 30, 2023 , the Company has $ 48.3 million remaining under the stock repurchase program. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 18. Segment Information The Company operates in two reportable segments: Federal Solutions and Critical Infrastructure. The Federal Solutions segment provides advanced technical solutions to the U.S. government, delivering timely, cost-effective hardware, software and services for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cybersecurity, missile defense, and military facility modernization, logistics support, hazardous material remediation and engineering services. The Critical Infrastructure segment provides integrated engineering and management services for complex physical and digital infrastructure around the globe. The Critical Infrastructure segment is a technology innovator focused on next generation digital systems and complex structures. Industry leading capabilities in engineering and project management allow the Company to deliver significant value to customers by employing cutting-edge technologies, improving timelines and reducing costs. The Company defines its reportable segments based on the way the chief operating decision maker (“CODM”), its Chair and Chief Executive Officer, evaluates the performance of each segment and manages the operations of the Company for purposes of allocating resources among the segments. The CODM evaluates segment operating performance using segment Revenue and segment Adjusted EBITDA attributable to Parsons Corporation. The following table summarizes business segment revenue for the periods presented (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Federal Solutions revenue $ 780,114 $ 620,416 $ 2,177,457 $ 1,649,601 Critical Infrastructure revenue 638,457 513,954 1,771,066 1,442,559 Total revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 The Company defines Adjusted EBITDA attributable to Parsons Corporation as Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests. The Company defines 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 are not considered in the evaluation of ongoing operating performance. These other items include net income (loss) attributable to noncontrolling interests, asset impairment charges, equity-based compensation, income and expense recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs and expenses related to our prior restructuring. The following table reconciles business segment Adjusted EBITDA attributable to Parsons Corporation to Net Income attributable to Parsons Corporation for the periods presented (in thousands): Three Months Ended Nine Months Ended Adjusted EBITDA attributable to Parsons Corporation September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Federal Solutions $ 65,039 $ 61,004 $ 206,827 $ 151,287 Critical Infrastructure 50,188 27,545 95,481 81,020 Adjusted EBITDA attributable to Parsons Corporation 115,227 88,549 302,308 232,307 Adjusted EBITDA attributable to noncontrolling interests 12,606 14,138 34,222 22,042 Depreciation and amortization ( 30,154 ) ( 29,578 ) ( 87,202 ) ( 90,668 ) Interest expense, net ( 8,120 ) ( 5,941 ) ( 20,778 ) ( 14,168 ) Income tax expense ( 15,218 ) ( 13,792 ) ( 41,944 ) ( 27,643 ) Equity-based compensation expense ( 9,075 ) ( 7,125 ) ( 25,092 ) ( 15,814 ) Transaction-related costs (a) ( 5,493 ) ( 2,563 ) ( 9,028 ) ( 14,486 ) Restructuring expense (b) - - ( 546 ) ( 213 ) Other (c) 38 ( 93 ) ( 2,082 ) ( 1,139 ) Net income including noncontrolling interests 59,811 43,595 149,858 90,218 Net income attributable to noncontrolling interests 12,364 14,024 33,617 21,685 Net income attributable to Parsons Corporation $ 47,447 $ 29,571 $ 116,241 $ 68,533 (a) Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention. (b) Reflects costs associated with corporate restructuring initiatives. (c) Includes a combination of gain/loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature. Asset information by segment is not a key measure of performance used by the CODM. The following tables present revenues and property and equipment, net by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue North America $ 1,166,547 $ 944,942 $ 3,251,552 $ 2,571,741 Middle East 247,689 184,680 684,340 504,078 Rest of World 4,335 4,748 12,631 16,341 Total Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 The geographic location of revenue is determined by the location of the customer (in thousands): September 30, 2023 December 31, 2022 Property and Equipment, Net North America $ 92,279 $ 91,217 Middle East 7,065 4,833 Total Property and Equipment, Net $ 99,344 $ 96,050 North America includes revenue in the United States for the three months ended September 30, 2023 and September 30, 2022 of $ 1.1 billion and $ 0.9 billion, respectively and for the nine months ended September 30, 2023 and September 30, 2022 of $ 3.0 billion and $ 2.3 billion, respectively. North America property and equipment, net includes $ 85.2 million and $ 84.4 million of property and equipment, net in the United States at September 30, 2023 and December 31, 2022, respectively. The following table presents revenues by business units (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue Defense and Intelligence $ 398,632 $ 351,419 $ 1,144,320 $ 1,037,244 Engineered Systems 381,482 268,997 1,033,137 612,357 Federal Solutions revenues 780,114 620,416 2,177,457 1,649,601 Mobility Solutions 430,011 329,666 1,209,554 924,834 Connected Communities 208,446 184,288 561,512 517,725 Critical Infrastructure revenues 638,457 513,954 1,771,066 1,442,559 Total Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events On October 31, 2023, the Company entered into a Membership Interest Purchase Agreement to acquire a 100 % ownership interest in I.S. Engineers, LLC, a privately-owned company, for $ 11.5 million, subject to certain adjustments. Headquartered in Texas, I.S. Engineers, LLC provides f ull service consulting specializing in transportation engineering, including roads and highways, and program management. At the timing of the filing of this Form 10-Q, the Company has just started the process of obtaining the relevant data to make the required acquisition related disclosures. This acquisition is not material to the Company's consolidated financial statements. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the interim period reporting requirements of Form 10-Q. They do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with our consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full year or for future years. This Quarterly Report on Form 10-Q includes the accounts of Parsons Corporation and its subsidiaries and affiliates which it controls. Interests in joint ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts a significant influence, the Company applies the equity method of accounting (see “Note 14 – Investments in and Advances to Joint Ventures" for further discussion). Intercompany accounts and transactions are eliminated in consolidation. Certain amounts may not foot due to rounding. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the costs to complete contracts and transaction price; determination of self-insurance reserves; useful lives of property and equipment and intangible assets; valuation of goodwill, intangible assets and net assets acquired from business acquisitions; valuation of deferred income tax assets and uncertain tax positions, among others. 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 Policies” in the notes to our consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2022 , for a discussion of the significant estimates and assumptions affecting our consolidated financial statements. Estimates of costs to complete contracts are continually evaluated as work progresses and are revised when necessary. When a change in estimate is determined to have an impact on contract profit, the Company records a positive or negative adjustment to the consolidated statement of income. |
New Accounting Pronouncements | In the first quarter of 2022 , the Company early adopted ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The new guidance requires that the approach of ASC 606, Revenue from Contracts with Customers, should be used to measure an acquired revenue contract in a business combination. This guidance is to be applied (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The early adoption of ASU 2021-08 did no t have a material impact on the consolidated financial statements. During July 2023, the Financial Accounting Standards Board Issued ASU No. 2023-03. ASU No. 2023-03 incorporates, into certain accounting standards, amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revisions of Regulation S-X: Income or Loss Applicable to Common Stock. These rules are effective immediately. The significant amendment in this guidance impacting the Company involves share-based payment awards granted when the Company is in possession of material non-public information to which the market is likely to react positively when the information is announced. For each award granted, the Company needs to determine, at the date of the grant, whether positive material non-public information is currently available (or would be available) to the issuer that would be considered by a marketplace participant in estimating the expected volatility. If positive material non-public information is available, the Company should consider the future events in estimating expected volatility. ASU No. 2023-03 had no impact on the Company's consolidated financial statements as of and for the periods ending September 30, 2023. |
Leases | The Company has operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment. Our leases have remaining lease terms of one to nine years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases after the third year . |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Sealing Technologies, Inc. | |
Schedule of Acquisition Date Fair Value of the Purchase Consideration Transferred | The following table summarizes the acquisition date fair value of the purchase consideration transferred (in thousands): Amount Cash paid at closing $ 181,690 Fair value of contingent consideration to be achieved 3,443 Total purchase price $ 185,133 Changes in the fair value of contingent consideration, when they occur, are recorded in the consolidated statements of income within “Selling, general and administrative expense” . |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Purchase Price Allocation | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the preliminary purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 8,133 Accounts receivable 17,889 Contract assets 2,960 Other current assets 1,379 Property and equipment 1,635 Right of use asset 1,288 Deferred tax assets 686 Goodwill 106,241 Intangible assets 59,900 Accounts payable ( 15,987 ) Accrued expenses and other current liabilities ( 2,377 ) Contract liabilities ( 493 ) Short-term lease liabilities ( 540 ) Deferred tax liabilities ( 330 ) Long-term lease liabilities ( 551 ) Net assets acquired $ 179,833 |
Schedule of Intangible Assets Value on Purchase Price | Of the total purchase price, the following values were preliminarily assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships $ 31,400 8 Backlog 18,500 8 Developed technologies 8,000 5 Other 2,000 1 to 3 |
Schedule of Supplemental Pro Forma Information | Supplemental information of unaudited pro forma operating results assuming the SealingTech acquisition had been consummated as of the beginning of fiscal year 2022 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,450,376 $ 1,154,603 $ 4,030,873 $ 3,134,609 Pro forma Net Income including noncontrolling interests 66,010 42,820 $ 161,544 $ 77,218 |
IPKeys Power Partners | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Purchase Price Allocation | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the preliminary purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 126 Accounts receivable 3,937 Contract assets 834 Other current assets 422 Property and equipment 86 Right of use asset 129 Other noncurrent assets 56 Goodwill 24,126 Intangible assets 23,000 Accounts payable ( 541 ) Accrued expenses and other current liabilities ( 1,768 ) Contract liabilities ( 1,936 ) Deferred tax liabilities ( 5,432 ) Net assets acquired $ 43,039 |
Schedule of Intangible Assets Value on Purchase Price | Of the total purchase price, the following values were preliminarily assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships (1) $ 15,900 16 Developed technologies 7,000 11 Other $ 100 1 (1) The acquired business is a SaaS commercial business. Backlog for this type of business is included as customer relationships. |
Schedule of Supplemental Pro Forma Information | Supplemental information of unaudited pro forma operating results assuming the IPKeys acquisition had been consummated as of the beginning of fiscal year 2022 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,418,571 $ 1,137,381 $ 3,951,378 $ 3,101,246 Pro forma Net Income including noncontrolling interests 60,187 42,907 $ 151,917 $ 87,427 |
Xator Corporation | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Purchase Price Allocation | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the purchase price allocation as of the date of acquisition (in thousands): Amount Cash and cash equivalents $ 8,935 Accounts receivable 7,393 Contract assets 24,332 Prepaid expenses and other current assets 3,615 Property and equipment 1,699 Right of use assets, operating leases 7,517 Goodwill 257,934 Investments in and advances to unconsolidated joint ventures 698 Intangible assets 123,500 Other noncurrent assets 9,156 Accounts payable ( 6,626 ) Accrued expenses and other current liabilities ( 31,309 ) Contract liabilities ( 2,631 ) Short-term lease liabilities, operating leases ( 2,371 ) Long-term lease liabilities, operating leases ( 5,146 ) Other long-term liabilities ( 9,156 ) Net assets acquired $ 387,540 |
Schedule of Intangible Assets Value on Purchase Price | Of the total purchase price, the following values were assigned to intangible assets (in thousands, except for years): Gross Amortization (in years) Customer relationships $ 37,000 15 Backlog 81,000 6 Trade name 4,000 1 Developed technologies 1,000 3 Non-compete agreements $ 500 3 |
Schedule of Supplemental Pro Forma Information | Supplemental information of unaudited pro forma operating results assuming the Xator acquisition had been consummated as of the beginning of fiscal year 2021 (in thousands) is as follows: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Pro forma Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,199,336 Pro forma Net Income including noncontrolling interests 60,374 43,970 154,275 102,859 |
Contracts with Customers (Table
Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The Company’s contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggregated by contract type (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Fixed-Price $ 452,606 $ 334,853 $ 1,233,712 $ 854,835 Time-and-Materials 355,689 302,236 998,037 836,881 Cost-Plus 610,276 497,281 1,716,774 1,400,444 Total $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 |
Summary of Contract Assets and Contract Liabilities | Contract assets and contract liabilities balances at September 30, 2023 and December 31, 2022 were as follows (in thousands): September 30, 2023 December 31, 2022 $ change % change Contract assets $ 756,630 $ 634,033 $ 122,597 19.3 % Contract liabilities 277,249 213,064 64,185 30.1 % Net contract assets (liabilities) (1) $ 479,381 $ 420,969 $ 58,412 13.9 % (1) Total contract retentions included in net contract assets (liabilities) were $ 73.7 million as of September 30, 2023, of which $ 34.7 million are not expected to be paid in the next 12 months. Total contract retentions included in net contract assets (liabilities) were $ 73.5 million as of December 31, 2022. Contract assets at September 30, 2023 and December 31, 2022 include $ 105.6 million and $ 95.7 million , respectively, related to net claim recovery estimates. For the three and nine months ended September 30, 2023 and September 30, 2022 , there were no material losses recognized related to the collectability of claims, unapproved change orders, and requests for equitable adjustment. |
Summary of Changes in Contract Assets and Contract Liabilities | Certain changes in contract assets and contract liabilities consisted of the following: September 30, 2023 December 31, 2022 Acquired contract assets $ 2,729 $ 25,397 Acquired contract liabilities 2,980 2,080 |
Summary of Changes in Revenue | Revisions in estimates, such as changes in estimated claims or incentives, related to performance obligations partially satisfied in previous periods that individually had an impact of $ 5 million or more on revenue resulted in the following changes in revenue: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue impact, net $ - $ - $ 4,748 $ - |
Summary of Accounts Receivable, Net | Accounts receivable, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): 2023 2022 Billed $ 587,160 $ 502,411 Unbilled 323,592 218,945 Total accounts receivable, gross 910,752 721,356 Allowance for doubtful accounts ( 4,011 ) ( 4,011 ) Total accounts receivable, net $ 906,741 $ 717,345 |
Summary of Remaining Unsatisfied Performance Obligations Expect to Satisfy | The Company expects to satisfy its RUPO as of September 30, 2023 over the following periods (in thousands): Period RUPO Will Be Satisfied Within One Year Within One to Two Years Thereafter Federal Solutions $ 1,620,465 $ 335,848 $ 240,563 Critical Infrastructure 1,893,315 1,076,331 1,011,917 Total $ 3,513,780 $ 1,412,179 $ 1,252,480 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Summary of Lease Costs | The components of lease costs for the three and nine months ended September 30, 2023 and September 30, 2022 are as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating lease cost $ 16,885 $ 16,299 $ 50,639 $ 49,049 Short-term lease cost 2,823 3,858 9,882 10,948 Amortization of right-of-use assets 718 571 1,904 1,721 Interest on lease liabilities 73 24 171 67 Sublease income ( 1,186 ) ( 1,318 ) ( 3,549 ) ( 3,321 ) Total lease cost $ 19,313 $ 19,434 $ 59,047 $ 58,464 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and September 30, 2022 is as follows (in thousands): Nine Months Ended September 30, 2023 September 30, 2022 Operating cash flows for operating leases $ 53,040 $ 51,988 Operating cash flows for finance leases 171 67 Financing cash flows from finance leases 1,865 1,580 Right-of-use assets obtained in exchange for new operating lease liabilities 48,430 15,709 Right-of-use assets obtained in exchange for new finance lease liabilities $ 4,470 $ 1,156 |
Schedule of Supplemental Balance Sheet and Other Information Related to Leases | Supplemental balance sheet and other information related to leases as of September 30, 2023 and December 31, 2022 are as follows (in thousands): September 30, 2023 December 31, 2022 Operating Leases: Right-of-use assets $ 158,400 $ 155,090 Lease liabilities: Current 56,930 59,144 Long-term 119,281 111,417 Total operating lease liabilities $ 176,211 $ 170,561 Finance Leases: Other noncurrent assets $ 6,559 $ 3,965 Accrued expenses and other current liabilities $ 2,358 $ 1,746 Other long-term liabilities $ 4,198 $ 2,246 Weighted Average Remaining Lease Term: Operating leases 4.0 years 3.6 years Finance leases 3.0 years 2.6 years Weighted Average Discount Rate: Operating leases 4.0 % 3.4 % Finance leases 4.2 % 2.8 % |
Schedule of Maturity Analysis of Future Undiscounted Cash Flows | A maturity analysis of the future undiscounted cash flows associated with the Company’s operating and finance lease liabilities as of September 30, 2023 is as follows (in thousands): Operating Leases Finance Leases 2023 (remaining) $ 17,404 $ 673 2024 58,599 2,518 2025 45,042 2,056 2026 28,876 1,418 2027 16,536 314 Thereafter 24,290 4 Total lease payments 190,747 6,983 Less: imputed interest ( 14,536 ) ( 427 ) Total present value of lease liabilities $ 176,211 $ 6,556 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Value of Goodwill by Reporting Segment | The following table summarizes the changes in the carrying value of goodwill by reporting segment from December 31, 2022 to September 30, 2023 (in thousands): December 31, 2022 Acquisitions Foreign Exchange September 30, 2023 Federal Solutions $ 1,591,563 $ 110,984 $ - $ 1,702,547 Critical Infrastructure 70,287 24,126 370 94,783 Total $ 1,661,850 $ 135,110 $ 370 $ 1,797,330 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Amount and Accumulated Amortization of Intangible Assets | The gross amount and accumulated amortization of intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets are as follows (in thousands except for years): September 30, 2023 December 31, 2022 Weighted Gross Accumulated Net Gross Accumulated Net Amortization (in years) Backlog $ 160,700 $ ( 71,713 ) $ 88,987 $ 142,200 $ ( 45,903 ) $ 96,297 4.3 Customer relationships 345,620 ( 174,196 ) 171,424 293,730 ( 146,032 ) 147,698 9.0 Leases 120 ( 101 ) 19 120 ( 87 ) 33 1.0 Developed technology 31,600 ( 14,145 ) 17,455 16,600 ( 11,560 ) 5,040 5.5 Trade name 1,200 ( 267 ) 933 5,000 ( 3,083 ) 1,917 1.1 Non-compete agreements 2,150 ( 1,587 ) 563 3,350 ( 2,074 ) 1,276 3.3 In process research and development 1,800 - 1,800 1,800 - 1,800 n/a Other intangibles 1,175 ( 258 ) 917 275 ( 209 ) 66 3.5 Total intangible assets $ 544,365 $ ( 262,267 ) $ 282,098 $ 463,075 $ ( 208,948 ) $ 254,127 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for the remainder of the current fiscal year, each of the next four years and beyond is as follows (in thousands): September 30, 2023 2023 $ 18,505 2024 45,773 2025 39,599 2026 35,880 2027 34,766 Thereafter 105,775 Total $ 280,298 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following at September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Useful life Buildings and leasehold improvements $ 105,192 $ 103,071 1 - 15 Furniture and equipment 88,856 85,088 3 - 10 Computer systems and equipment 174,215 152,511 3 - 10 Construction equipment 6,389 5,271 5 - 7 Construction in progress 15,331 21,952 389,983 367,893 Accumulated depreciation ( 290,639 ) ( 271,843 ) Property and equipment, net $ 99,344 $ 96,050 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following (in thousands): September 30, 2023 December 31, 2022 Long-Term Debt: Delayed draw term loan $ 350,000 $ 350,000 Convertible senior notes 400,000 400,000 Revolving credit facility 75,000 - Debt issuance costs ( 4,634 ) ( 6,395 ) Total $ 820,366 $ 743,605 |
Investments in and Advances t_2
Investments in and Advances to Joint Ventures (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Financial Information of Consolidated Joint Ventures | The following represents financial information for consolidated joint ventures included in the consolidated financial statements (in thousands): September 30, 2023 December 31, 2022 Current assets $ 418,854 $ 289,837 Noncurrent assets 11,637 9,961 Total assets 430,491 299,798 Current liabilities 278,168 194,701 Noncurrent liabilities 3,504 3,763 Total liabilities 281,672 198,464 Total joint venture equity $ 148,819 $ 101,334 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue $ 185,602 $ 130,344 $ 514,339 $ 333,967 Costs 160,423 101,882 445,829 289,485 Net income $ 25,179 $ 28,462 $ 68,510 $ 44,482 Net income attributable to noncontrolling interests $ 12,364 $ 14,024 $ 33,617 $ 21,685 |
Summary of Financial Information for Unconsolidated Joint Ventures | The following represents the financial information of the Company’s unconsolidated joint ventures as presented in their unaudited financial statements (in thousands): September 30, 2023 December 31, 2022 Current assets $ 1,513,825 $ 1,610,246 Noncurrent assets 481,708 491,658 Total assets 1,995,533 2,101,904 Current liabilities 960,276 1,255,297 Noncurrent liabilities 503,705 468,056 Total liabilities 1,463,981 1,723,353 Total joint venture equity $ 531,552 $ 378,551 Investments in and advances to unconsolidated joint ventures $ 164,858 $ 107,425 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue $ 634,937 $ 782,880 $ 1,514,561 $ 1,762,420 Costs 581,041 774,030 1,474,991 1,711,555 Net income $ 53,896 $ 8,850 $ 39,570 $ 50,865 Equity in (losses) earnings of unconsolidated joint ventures $ 10,262 $ ( 974 ) $ 4,497 $ 10,237 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Consolidated Balance Sheet Related to Services Provided to Unconsolidated Joint Ventures | Amounts included in the consolidated balance sheets related to services the Company provided to unconsolidated joint ventures are as follows (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 41,043 $ 40,795 Contract assets 40,032 30,578 Contract liabilities 14,161 14,318 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares Used To Compute Basic and Diluted EPS | The weighted average number of shares used to compute basic and diluted EPS were: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Basic weighted average number of shares outstanding 104,970,645 103,608,135 104,894,448 103,684,048 Stock-based awards 1,177,894 918,090 1,020,082 746,702 Convertible senior notes 8,916,530 8,916,530 8,916,530 8,916,530 Diluted weighted average number of shares outstanding 115,065,069 113,442,755 114,831,060 113,347,280 |
Net Income Available to Shareholders to Compute Basic and Diluted EPS | The net income available to shareholders to compute basic and diluted EPS were (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income attributable to Parsons Corporation $ 47,447 $ 29,571 116,241 68,533 Convertible senior notes if-converted method interest adjustment 559 545 1,665 1,627 Diluted net income attributable to Parsons Corporation $ 48,006 $ 30,116 117,906 70,160 |
Schedule of Repurchase Program | The table below presents information on this repurchase program: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Total shares repurchased - 95,413 185,475 522,501 Total shares retired - 95,413 185,475 522,501 Average price paid per share $ - $ 41.42 $ 43.13 $ 37.32 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Business Segment Information | The following table summarizes business segment revenue for the periods presented (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Federal Solutions revenue $ 780,114 $ 620,416 $ 2,177,457 $ 1,649,601 Critical Infrastructure revenue 638,457 513,954 1,771,066 1,442,559 Total revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 |
Summary of Adjusted EBITDA Business Segment Information | The following table reconciles business segment Adjusted EBITDA attributable to Parsons Corporation to Net Income attributable to Parsons Corporation for the periods presented (in thousands): Three Months Ended Nine Months Ended Adjusted EBITDA attributable to Parsons Corporation September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Federal Solutions $ 65,039 $ 61,004 $ 206,827 $ 151,287 Critical Infrastructure 50,188 27,545 95,481 81,020 Adjusted EBITDA attributable to Parsons Corporation 115,227 88,549 302,308 232,307 Adjusted EBITDA attributable to noncontrolling interests 12,606 14,138 34,222 22,042 Depreciation and amortization ( 30,154 ) ( 29,578 ) ( 87,202 ) ( 90,668 ) Interest expense, net ( 8,120 ) ( 5,941 ) ( 20,778 ) ( 14,168 ) Income tax expense ( 15,218 ) ( 13,792 ) ( 41,944 ) ( 27,643 ) Equity-based compensation expense ( 9,075 ) ( 7,125 ) ( 25,092 ) ( 15,814 ) Transaction-related costs (a) ( 5,493 ) ( 2,563 ) ( 9,028 ) ( 14,486 ) Restructuring expense (b) - - ( 546 ) ( 213 ) Other (c) 38 ( 93 ) ( 2,082 ) ( 1,139 ) Net income including noncontrolling interests 59,811 43,595 149,858 90,218 Net income attributable to noncontrolling interests 12,364 14,024 33,617 21,685 Net income attributable to Parsons Corporation $ 47,447 $ 29,571 $ 116,241 $ 68,533 (a) Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention. (b) Reflects costs associated with corporate restructuring initiatives. (c) Includes a combination of gain/loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature. |
Summary of Revenues and Property and Equipment, Net by Geographic Area | The following tables present revenues and property and equipment, net by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue North America $ 1,166,547 $ 944,942 $ 3,251,552 $ 2,571,741 Middle East 247,689 184,680 684,340 504,078 Rest of World 4,335 4,748 12,631 16,341 Total Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 The geographic location of revenue is determined by the location of the customer (in thousands): September 30, 2023 December 31, 2022 Property and Equipment, Net North America $ 92,279 $ 91,217 Middle East 7,065 4,833 Total Property and Equipment, Net $ 99,344 $ 96,050 |
Summary of Revenues by Business Lines | The following table presents revenues by business units (in thousands): Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Revenue Defense and Intelligence $ 398,632 $ 351,419 $ 1,144,320 $ 1,037,244 Engineered Systems 381,482 268,997 1,033,137 612,357 Federal Solutions revenues 780,114 620,416 2,177,457 1,649,601 Mobility Solutions 430,011 329,666 1,209,554 924,834 Connected Communities 208,446 184,288 561,512 517,725 Critical Infrastructure revenues 638,457 513,954 1,771,066 1,442,559 Total Revenue $ 1,418,571 $ 1,134,370 $ 3,948,523 $ 3,092,160 |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Details) - ASU 2021-08 | Sep. 30, 2023 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 |
Change in accounting principle, accounting standards update, early adoption | true |
Change in accounting principle, accounting standards update, immaterial effect | true |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Aug. 23, 2023 USD ($) | Apr. 13, 2023 USD ($) | May 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Amortization of intangible assets | $ 18,800,000 | $ 19,100,000 | $ 54,900,000 | $ 58,900,000 | ||||
Revenues | 1,418,571,000 | 1,134,370,000 | 3,948,523,000 | 3,092,160,000 | ||||
Sealing Technologies, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of ownership interest acquired | 100% | |||||||
Cash paid to acquire | $ 181,690,000 | |||||||
Borrowed under credit agreement to fund the acquisition | 175,000,000 | |||||||
Acquisition related expenses | $ 3,100,000 | |||||||
Earn out payment due and payable to the selling shareholders, Multiplier | 0.5 | |||||||
Amortization of intangible assets | 1,500,000 | 1,500,000 | ||||||
Revenues | 18,400,000 | 18,400,000 | ||||||
Sealing Technologies, Inc. | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional amount agreed to pay the selling shareholders in the event an earn out revenue target is exceeded | $ 25,000,000 | |||||||
Earn out revenue target, amount | 110,000,000 | |||||||
Target amount of earnout revenue | 25,000,000 | |||||||
Sealing Technologies, Inc. | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Target amount of earnout revenue | $ 0 | |||||||
IPKeys Power Partners | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of ownership interest acquired | 100% | |||||||
Cash paid to acquire | $ 43,000,000 | |||||||
Amortization of intangible assets | 500,000 | 900,000 | ||||||
Goodwill deductible for tax purposes | $ 1,000,000 | |||||||
Revenues | 3,500,000 | 6,100,000 | ||||||
IPKeys Power Partners | Selling, General and Administrative Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition related expenses | 100,000 | 600,000 | ||||||
Xator Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of ownership interest acquired | 100% | |||||||
Cash paid to acquire | $ 387,500,000 | |||||||
Borrowed under credit agreement to fund the acquisition | $ 300,000,000 | |||||||
Amortization of intangible assets | $ 4,100,000 | 4,900,000 | $ 14,000,000 | 6,600,000 | ||||
Revenues | $ 70,400,000 | $ 91,200,000 | ||||||
Xator Corporation | Selling, General and Administrative Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition related expenses | $ 7,700,000 |
Acquisitions - Schedule Of Acqu
Acquisitions - Schedule Of Acquisition Date Fair Value of the Purchase Consideration Transferred (Details) - Sealing Technologies, Inc. $ in Thousands | Aug. 23, 2023 USD ($) |
Business Acquisition [Line Items] | |
Cash paid at closing | $ 181,690 |
Fair value of contingent consideration to be achieved | 3,443 |
Total purchase price | $ 185,133 |
Acquisitions - Summary of Estim
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Aug. 23, 2023 | Apr. 13, 2023 | Dec. 31, 2022 | May 31, 2022 |
Business Acquisition [Line Items] | |||||
Contract assets | $ 756,630 | $ 634,033 | |||
Goodwill | 1,797,330 | 1,661,850 | |||
Investments in and advances to unconsolidated joint ventures | 164,858 | 107,425 | |||
Contract liabilities | $ (277,249) | $ (213,064) | |||
Sealing Technologies, Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 8,133 | ||||
Accounts receivable | 17,889 | ||||
Contract assets | 2,960 | ||||
Other current assets | 1,379 | ||||
Property and equipment | 1,635 | ||||
Right of use assets, operating leases | 1,288 | ||||
Deferred tax assets | 686 | ||||
Goodwill | 106,241 | ||||
Intangible assets | 59,900 | ||||
Accounts payable | (15,987) | ||||
Accrued expenses and other current liabilities | (2,377) | ||||
Contract liabilities | (493) | ||||
Short-term lease liabilities | (540) | ||||
Deferred tax liabilities | (330) | ||||
Long-term lease liabilities | (551) | ||||
Net assets acquired | $ 179,833 | ||||
IPKeys Power Partners | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 126 | ||||
Accounts receivable | 3,937 | ||||
Contract assets | 834 | ||||
Other current assets | 422 | ||||
Property and equipment | 86 | ||||
Right of use assets, operating leases | 129 | ||||
Goodwill | 24,126 | ||||
Intangible assets | 23,000 | ||||
Other noncurrent assets | 56 | ||||
Accounts payable | (541) | ||||
Accrued expenses and other current liabilities | (1,768) | ||||
Contract liabilities | (1,936) | ||||
Deferred tax liabilities | (5,432) | ||||
Net assets acquired | $ 43,039 | ||||
Xator Corporation | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 8,935 | ||||
Accounts receivable | 7,393 | ||||
Contract assets | 24,332 | ||||
Prepaid expenses and other current assets | 3,615 | ||||
Property and equipment | 1,699 | ||||
Right of use assets, operating leases | 7,517 | ||||
Goodwill | 257,934 | ||||
Investments in and advances to unconsolidated joint ventures | 698 | ||||
Intangible assets | 123,500 | ||||
Other noncurrent assets | 9,156 | ||||
Accounts payable | (6,626) | ||||
Accrued expenses and other current liabilities | (31,309) | ||||
Contract liabilities | (2,631) | ||||
Short-term lease liabilities, operating leases | (2,371) | ||||
Long-term lease liabilities, operating leases | (5,146) | ||||
Other long-term liabilities | (9,156) | ||||
Net assets acquired | $ 387,540 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Value on Purchase Price (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Aug. 23, 2023 | Apr. 13, 2023 | May 31, 2022 | Sep. 30, 2023 | ||
Customer Relationships | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 9 years | ||||
Customer Relationships | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 31,400 | ||||
Amortization Period (in years) | 8 years | ||||
Customer Relationships | IPKeys Power Partners | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | [1] | $ 15,900 | |||
Amortization Period (in years) | [1] | 16 years | |||
Customer Relationships | Xator Corporation | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 37,000 | ||||
Amortization Period (in years) | 15 years | ||||
Backlog | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 4 years 3 months 18 days | ||||
Backlog | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 18,500 | ||||
Amortization Period (in years) | 8 years | ||||
Backlog | Xator Corporation | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 81,000 | ||||
Amortization Period (in years) | 6 years | ||||
Trade Names | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 1 year 1 month 6 days | ||||
Trade Names | Xator Corporation | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 4,000 | ||||
Amortization Period (in years) | 1 year | ||||
Developed Technologies | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 5 years 6 months | ||||
Developed Technologies | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 8,000 | ||||
Amortization Period (in years) | 5 years | ||||
Developed Technologies | IPKeys Power Partners | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 7,000 | ||||
Amortization Period (in years) | 11 years | ||||
Developed Technologies | Xator Corporation | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 1,000 | ||||
Amortization Period (in years) | 3 years | ||||
Other | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 3 years 6 months | ||||
Other | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 2,000 | ||||
Other | IPKeys Power Partners | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 100 | ||||
Amortization Period (in years) | 1 year | ||||
Other | Minimum | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 1 year | ||||
Other | Maximum | Sealing Technologies, Inc. | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 3 years | ||||
Noncompete Agreements | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Amortization Period (in years) | 3 years 3 months 18 days | ||||
Noncompete Agreements | Xator Corporation | |||||
Acquired Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 500 | ||||
Amortization Period (in years) | 3 years | ||||
[1] The acquired business is a SaaS commercial business. Backlog for this type of business is included as customer relationships. |
Acquisitions - Schedule of Supp
Acquisitions - Schedule of Supplemental Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
IPKeys Power Partners | ||||
Business Acquisition [Line Items] | ||||
Pro forma Revenue | $ 1,418,571 | $ 1,137,381 | $ 3,951,378 | $ 3,101,246 |
Pro forma Net Income including noncontrolling interests | 60,187 | 42,907 | 151,917 | 87,427 |
Xator Corporation | ||||
Business Acquisition [Line Items] | ||||
Pro forma Revenue | 1,418,571 | 1,134,370 | 3,948,523 | 3,199,336 |
Pro forma Net Income including noncontrolling interests | 60,374 | 43,970 | 154,275 | 102,859 |
Sealing Technologies, Inc. | ||||
Business Acquisition [Line Items] | ||||
Pro forma Revenue | 1,450,376 | 1,154,603 | 4,030,873 | 3,134,609 |
Pro forma Net Income including noncontrolling interests | $ 66,010 | $ 42,820 | $ 161,544 | $ 77,218 |
Contracts with Customers - Summ
Contracts with Customers - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 |
Fixed-Price | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 452,606 | 334,853 | 1,233,712 | 854,835 |
Time-and-Materials | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 355,689 | 302,236 | 998,037 | 836,881 |
Cost-Plus | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 610,276 | $ 497,281 | $ 1,716,774 | $ 1,400,444 |
Contracts with Customers - Su_2
Contracts with Customers - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 756,630 | $ 634,033 |
Contract liabilities | 277,249 | 213,064 |
Net contract assets (liabilities) | 479,381 | $ 420,969 |
Change in contract assets | 122,597 | |
Change in contract liabilities | 64,185 | |
Change in contract assets and liabilities | $ 58,412 | |
Percentage change in contract assets | 19.30% | |
Percentage change in contract liabilities | 30.10% | |
Percentage change in contract assets and liabilities | 13.90% |
Contracts with Customers - Su_3
Contracts with Customers - Summary of Contract Assets and Contract Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract retentions | $ 73.7 | $ 73.5 |
Contract retentions, not expected to be paid in next 12 months | 34.7 | |
Contract assets, net claims recovery estimated | $ 105.6 | $ 95.7 |
Contracts with Customers - Addi
Contracts with Customers - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue recognized included contract liability | $ 8,900,000 | $ 10,100,000 | $ 116,600,000 | $ 91,800,000 |
Impairment of contract assets | 0 | $ 0 | ||
Impact of changes in estimated claims or incentives on revenue | 5,000,000 | |||
Decrease in operating income | 12,400,000 | |||
Decrease in net income net of tax | $ 9,200,000 | |||
Decrease in earnings per share diluted | $ 0.03 | $ 0.08 | ||
Remaining unsatisfied performance obligations | $ 6,200,000,000 | $ 6,200,000,000 | ||
Critical Infrastructure | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Decrease in operating income | 3,100,000 | |||
Decrease in net income net of tax | $ 2,300,000 | |||
Decrease in earnings per share diluted | $ 0.02 |
Contracts with Customers - Su_4
Contracts with Customers - Summary of Changes in Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Acquired contract assets | $ 2,729 | $ 25,397 |
Acquired contract liabilities | $ 2,980 | $ 2,080 |
Contracts with Customers - Su_5
Contracts with Customers - Summary of Changes in Revenue (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue impact, net | $ 4,748 |
Contracts with Customers - Su_6
Contracts with Customers - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 587,160 | $ 502,411 |
Unbilled | 323,592 | 218,945 |
Total accounts receivable, gross | 910,752 | 721,356 |
Allowance for doubtful accounts | (4,011) | (4,011) |
Total accounts receivable, net | $ 906,741 | $ 717,345 |
Contracts with Customers - Su_7
Contracts with Customers - Summary of Remaining Unsatisfied Performance Obligations Expect to Satisfy (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 6,200,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 3,513,780 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,412,179 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,252,480 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Federal Solution Segment | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,620,465 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Federal Solution Segment | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 335,848 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Federal Solution Segment | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 240,563 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Critical Infrastructure | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,893,315 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Critical Infrastructure | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,076,331 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Critical Infrastructure | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligations | $ 1,011,917 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Lessee Lease Description [Line Items] | |
Lease option to extend | five years |
Lease existence of option to extend | true |
Lease option to terminate | third year |
Lease existence of option to terminate | true |
Operating lease not yet commenced expense | $ 0 |
Minimum | |
Lessee Lease Description [Line Items] | |
Lease term of contract | 1 year |
Maximum | |
Lessee Lease Description [Line Items] | |
Lease term of contract | 9 years |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 16,885 | $ 16,299 | $ 50,639 | $ 49,049 |
Short-term lease cost | 2,823 | 3,858 | 9,882 | 10,948 |
Amortization of right-of-use assets | 718 | 571 | 1,904 | 1,721 |
Interest on lease liabilities | 73 | 24 | 171 | 67 |
Sublease income | (1,186) | (1,318) | (3,549) | (3,321) |
Total lease cost | $ 19,313 | $ 19,434 | $ 59,047 | $ 58,464 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 53,040 | $ 51,988 |
Operating cash flows for finance leases | 171 | 67 |
Financing cash flows from finance leases | 1,865 | 1,580 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 48,430 | 15,709 |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 4,470 | $ 1,156 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Balance Sheet and Other Information Related to Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases: | ||
Right-of-use assets | $ 158,400 | $ 155,090 |
Lease liabilities: | ||
Current | 56,930 | 59,144 |
Long-term | 119,281 | 111,417 |
Total operating lease liabilities | 176,211 | 170,561 |
Finance Leases: | ||
Other noncurrent assets | 0 | 3,965 |
Accrued expenses and other current liabilities | $ 0 | $ 1,746 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current liabilities | Current liabilities |
Other long-term liabilities | $ 0 | $ 2,246 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Weighted Average Remaining Lease Term: | ||
Operating leases | 4 years | 3 years 7 months 6 days |
Finance leases | 3 years | 2 years 7 months 6 days |
Weighted Average Discount Rate: | ||
Operating leases | 4% | 3.40% |
Finance leases | 4.20% | 2.80% |
Leases - Schedule of Maturity A
Leases - Schedule of Maturity Analysis of Future Undiscounted Cash Flows (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 (remaining) | $ 17,404 | |
2024 | 58,599 | |
2025 | 45,042 | |
2026 | 28,876 | |
2027 | 16,536 | |
Thereafter | 24,290 | |
Total lease payments | 190,747 | |
Less: imputed interest | (14,536) | |
Total present value of lease liabilities | 176,211 | $ 170,561 |
Finance Leases | ||
2023 (remaining) | 673 | |
2024 | 2,518 | |
2025 | 2,056 | |
2026 | 1,418 | |
2027 | 314 | |
Thereafter | 4 | |
Total lease payments | 6,983 | |
Less: imputed interest | (427) | |
Total present value of lease liabilities | $ 6,556 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Value of Goodwill by Reporting Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 1,661,850 |
Acquisitions | 135,110 |
Foreign Exchange | 370 |
Ending Balance | 1,797,330 |
Federal Solutions | |
Goodwill [Line Items] | |
Beginning Balance | 1,591,563 |
Acquisitions | 110,984 |
Foreign Exchange | 0 |
Ending Balance | 1,702,547 |
Critical Infrastructure | |
Goodwill [Line Items] | |
Beginning Balance | 70,287 |
Acquisitions | 24,126 |
Foreign Exchange | 370 |
Ending Balance | $ 94,783 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of goodwill | $ 0 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Gross Amount and Accumulated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 544,365 | $ 463,075 |
Accumulated Amortization | (262,267) | (208,948) |
Net Carrying Amount | 282,098 | 254,127 |
Backlog | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 160,700 | 142,200 |
Accumulated Amortization | (71,713) | (45,903) |
Net Carrying Amount | $ 88,987 | 96,297 |
Weighted Average Amortization Period (in years) | 4 years 3 months 18 days | |
Customer Relationships | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 345,620 | 293,730 |
Accumulated Amortization | (174,196) | (146,032) |
Net Carrying Amount | $ 171,424 | 147,698 |
Weighted Average Amortization Period (in years) | 9 years | |
Leases | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 120 | 120 |
Accumulated Amortization | (101) | (87) |
Net Carrying Amount | $ 19 | 33 |
Weighted Average Amortization Period (in years) | 1 year | |
Developed Technology | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 31,600 | 16,600 |
Accumulated Amortization | (14,145) | (11,560) |
Net Carrying Amount | $ 17,455 | 5,040 |
Weighted Average Amortization Period (in years) | 5 years 6 months | |
Trade Name | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,200 | 5,000 |
Accumulated Amortization | (267) | (3,083) |
Net Carrying Amount | $ 933 | 1,917 |
Weighted Average Amortization Period (in years) | 1 year 1 month 6 days | |
Noncompete Agreements | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,150 | 3,350 |
Accumulated Amortization | (1,587) | (2,074) |
Net Carrying Amount | $ 563 | 1,276 |
Weighted Average Amortization Period (in years) | 3 years 3 months 18 days | |
In Process Research and Development | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,800 | 1,800 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | 1,800 | 1,800 |
Other Intangibles | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,175 | 275 |
Accumulated Amortization | (258) | (209) |
Net Carrying Amount | $ 917 | $ 66 |
Weighted Average Amortization Period (in years) | 3 years 6 months |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 18.8 | $ 19.1 | $ 54.9 | $ 58.9 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 18,505 |
2024 | 45,773 |
2025 | 39,599 |
2026 | 35,880 |
2027 | 34,766 |
Thereafter | 105,775 |
Total | $ 280,298 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 389,983 | $ 367,893 |
Accumulated depreciation | (290,639) | (271,843) |
Property and equipment, net | 99,344 | 96,050 |
Buildings and Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 105,192 | 103,071 |
Buildings and Leasehold Improvements | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 1 year | |
Buildings and Leasehold Improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 15 years | |
Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 88,856 | 85,088 |
Furniture and Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 3 years | |
Furniture and Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 10 years | |
Computer Systems and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 174,215 | 152,511 |
Computer Systems and Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 3 years | |
Computer Systems and Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 10 years | |
Construction Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,389 | 5,271 |
Construction Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 5 years | |
Construction Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life (years) | 7 years | |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 15,331 | $ 21,952 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 10.2 | $ 9.7 | $ 29.1 | $ 29.3 |
Debt and Credit Facilities - Sc
Debt and Credit Facilities - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Convertible senior notes | $ 400,000 | $ 400,000 |
Long-term debt issuance costs | (4,634) | (6,395) |
Total | 820,366 | 743,605 |
2022 Delayed Draw Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 350,000 | 350,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 75,000 | $ 0 |
Debt and Credit Facilities - Ad
Debt and Credit Facilities - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) Extension | Aug. 31, 2020 USD ($) d $ / shares shares | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Sep. 30, 2023 USD ($) d $ / shares shares | Sep. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Nov. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Letters of credit outstanding amount | $ 311,800,000 | $ 311,800,000 | $ 222,500,000 | ||||||||
Deferred tax liabilities | 20,448,000 | 20,448,000 | 12,471,000 | ||||||||
Deferred tax assets | $ 148,512,000 | $ 148,512,000 | 137,709,000 | ||||||||
2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs incurred | $ 900,000 | ||||||||||
Interest rate | 6.60% | 6.60% | 5.60% | ||||||||
Interest expense | $ 5,900,000 | $ 16,600,000 | |||||||||
Debt instrument, outstanding amount | $ 0 | 350,000,000 | $ 0 | 350,000,000 | $ 0 | $ 350,000,000 | $ 350,000,000 | ||||
Debt amount | $ 350,000,000 | 350,000,000 | 350,000,000 | ||||||||
Debt issuance date | Sep. 30, 2022 | ||||||||||
Debt instrument, maturity period | 3 years | ||||||||||
Unused term loan commitments rate | 0.175% | ||||||||||
Convertible Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 0.25% | ||||||||||
Interest expense | 700,000 | 700,000 | $ 2,300,000 | 2,200,000 | |||||||
Debt amount | $ 400,000,000 | ||||||||||
Exercise of option by initial purchasers aggregate principal amount | 50,000,000 | ||||||||||
Proceeds from issuance and sale of debt | 389,700,000 | ||||||||||
Transaction fees and other third-party offering expenses | $ 10,300,000 | ||||||||||
Debt instrument, payment terms | The Convertible Senior Notes accrue interest at a rate of 0.25% per annum, payable semi-annually on February 15 and August 15 of each year beginning on February 15, 2021 | ||||||||||
Debt instrument, frequency of periodic payment | semi-annually | ||||||||||
Maturity Date | Aug. 15, 2025 | ||||||||||
Convertible note converted each amount | $ 1,000 | $ 1,000 | |||||||||
Convertible notes converted each into shares of common stock | shares | 22.2913 | ||||||||||
Debt Instrument, conversion price | $ / shares | $ 44.86 | $ 44.86 | |||||||||
Threshold trading days | d | 20 | 51 | |||||||||
Threshold consecutive trading days | d | 30 | ||||||||||
Conversion percentage of stock price trigger | 130% | ||||||||||
Number of business day period | 5 days | ||||||||||
Consecutive trading day period | 5 days | ||||||||||
Convertible principal amount | $ 1,000 | ||||||||||
Measurement period, percentage | 98% | ||||||||||
Percentage of principal amount to redeem convertible senior notes | 100% | ||||||||||
Percentage of convertible senior notes repurchased at cash | 100% | ||||||||||
Net carrying value of notes | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||||||||
Bond hedge term | 5 years | ||||||||||
Number of shares issuable upon conversion | shares | 8,900,000 | ||||||||||
Cost of convertible note hedge transaction | $ 55,000,000 | ||||||||||
Number of common stock acquired by offsetting sale warrants. | shares | 8,900,000 | ||||||||||
Exercise price of warrants | $ / shares | $ 66.46 | $ 66.46 | |||||||||
Proceeds from issuance of warrants | $ 13,800,000 | ||||||||||
Convertible Note Hedge And Warrant Transaction | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Purchase of bond hedges and sale of warrants | $ 41,200,000 | ||||||||||
Deferred tax liabilities | $ 16,200,000 | 16,200,000 | |||||||||
Deferred tax assets | 16,500,000 | 16,500,000 | |||||||||
Convertible Note Hedge And Warrant Transaction | ASC 2020-06 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Deferred tax liability reversed | 13,900,000 | 13,900,000 | |||||||||
Additional deferred tax liability related to capitalized debt issuance costs | 400,000 | 400,000 | |||||||||
Adjustment to deferred tax asset through retained earnings | $ 900,000 | $ 900,000 | |||||||||
Minimum [Member] | Convertible Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, conversion price | $ / shares | $ 44.86 | ||||||||||
Percentage of bond hedge and warrant transactions increased conversion price | 35% | ||||||||||
Maximum | 2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Increase in term loan | $ 150,000,000 | ||||||||||
Maximum | Convertible Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, conversion price | $ / shares | $ 66.46 | ||||||||||
Percentage of bond hedge and warrant transactions increased conversion price | 100% | ||||||||||
Base Rate | Minimum [Member] | 2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 0% | ||||||||||
Base Rate | Maximum | 2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 0.50% | ||||||||||
SOFR Benchmark Rate | Minimum [Member] | 2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 0.875% | ||||||||||
SOFR Benchmark Rate | Maximum | 2022 Delayed Draw Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 1.50% | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement date | Jun. 30, 2021 | ||||||||||
Revolving credit facility | $ 650,000,000 | $ 650,000,000 | |||||||||
Debt issuance costs incurred | 1,900,000 | 1,900,000 | |||||||||
Revolving credit facility | $ 550,000,000 | $ 550,000,000 | |||||||||
Credit agreement maturity period | 5 years | ||||||||||
Credit agreement number of extensions | Extension | 2 | ||||||||||
Interest rate | 6.70% | 6.70% | 5.70% | ||||||||
Letters of credit outstanding amount | $ 43,900,000 | $ 44,500,000 | |||||||||
Interest expense | $ 1,500,000 | $ 2,500,000 | $ 2,000,000 | $ 3,400,000 | |||||||
Debt instrument, outstanding amount | $ 75,000,000 | $ 75,000,000 | |||||||||
Revolving Credit Facility | Base Rate | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 0% | ||||||||||
Revolving Credit Facility | Base Rate | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 0.625% | ||||||||||
Revolving Credit Facility | SOFR Benchmark Rate | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 1% | ||||||||||
Revolving Credit Facility | SOFR Benchmark Rate | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Margin interest rate | 1.625% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 20.30% | 24% | 21.90% | 23.50% | |
Income tax expense | $ 15,218 | $ 13,792 | $ 41,944 | $ 27,643 | |
U.S. corporate tax rate | 21% | 21% | |||
Deferred tax assets, valuation allowance | $ 25,700 | $ 25,700 | |||
Liability for income taxes associated with uncertain tax positions | 25,100 | 25,100 | $ 22,800 | ||
Decrease in unrecognized tax benefits during the next twelve months | $ 1,400 | $ 1,400 |
Contingencies - Additional Info
Contingencies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) Claim | |
Legal Proceedings [Line Items] | |
Number of claims outstanding | Claim | 0 |
Alleged Violation of False Claims, Act | |
Legal Proceedings [Line Items] | |
Amount paid by relator to acquire vehicles for contractor defendant to perform security services | $ 2,900,000 |
Alleged Violation of False Claims, Act | Minimum | |
Legal Proceedings [Line Items] | |
Amount paid per month to contractor defendant by relator on false claims | 1,000,000 |
Loss contingency sought value, civil penalty for each alleged violation of Act | 5,500 |
Alleged Violation of False Claims, Act | Maximum | |
Legal Proceedings [Line Items] | |
Loss contingency sought value, civil penalty for each alleged violation of Act | $ 11,000 |
Retirement Benefit Plan - Addit
Retirement Benefit Plan - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Shares fully vested, Description | Shares allocated to a participant’s account are fully vested after three years of credited service, or in the event(s) of reaching age 65, death or disability while an active employee of the Company. | ||||
Shares fully vested after credited service | 3 years | ||||
Common stock shares outstanding including ESOP | 104,888,473 | 104,888,473 | 104,702,996 | ||
Company's stock held by ESOP | 59,752,326 | 59,752,326 | 63,742,151 | ||
Direct Costs of Contracts and Selling, General and Administrative Expense | |||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
ESOP contribution expense | $ 14.9 | $ 15.4 | $ 44.1 | $ 42 |
Investments in and Advances t_3
Investments in and Advances to Joint Ventures - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule Of Equity Method Investments [Line Items] | |||||
Letters of credit outstanding amount | $ 311.8 | $ 311.8 | $ 222.5 | ||
Adjustment on unconsolidated joint ventures | $ (5.1) | (12.4) | |||
Decrease in operating income | 12.4 | ||||
Decrease in net income net of tax | $ 9.2 | ||||
Decrease in earnings per share diluted | $ 0.03 | $ 0.08 | |||
Increase in operating income | $ 5.1 | ||||
Increase in net income net of tax | 3.8 | ||||
Unconsolidated Joint Ventures | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Net distributions from (contributions to) unconsolidated joint ventures | 36.1 | $ 13.2 | $ 50.8 | $ 21.4 | |
Joint Ventures | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Letters of credit outstanding amount | $ 149.9 | $ 149.9 | $ 106.8 |
Investments in and Advances t_4
Investments in and Advances to Joint Ventures - Summary of Financial Information for Consolidated Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule Of Equity Method Investments [Line Items] | |||||
Current assets | $ 2,015,541 | $ 2,015,541 | $ 1,719,783 | ||
Total assets | 4,732,988 | 4,732,988 | 4,198,142 | ||
Current liabilities | 1,394,093 | 1,394,093 | 1,108,119 | ||
Total liabilities | 2,484,888 | 2,484,888 | 2,102,207 | ||
Total joint venture equity | 2,172,736 | 2,172,736 | 2,043,570 | ||
Revenue | 1,418,571 | $ 1,134,370 | 3,948,523 | $ 3,092,160 | |
Costs | 1,124,305 | 872,423 | 3,109,713 | 2,388,095 | |
Net income attributable to Parsons Corporation | 47,447 | 29,571 | 116,241 | 68,533 | |
Net income attributable to noncontrolling interests | 12,364 | 14,024 | 33,617 | 21,685 | |
Consolidated Joint Ventures | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Current assets | 418,854 | 418,854 | 289,837 | ||
Noncurrent assets | 11,637 | 11,637 | 9,961 | ||
Total assets | 430,491 | 430,491 | 299,798 | ||
Current liabilities | 278,168 | 278,168 | 194,701 | ||
Noncurrent liabilities | 3,504 | 3,504 | 3,763 | ||
Total liabilities | 281,672 | 281,672 | 198,464 | ||
Total joint venture equity | 148,819 | 148,819 | $ 101,334 | ||
Revenue | 185,602 | 130,344 | 514,339 | 333,967 | |
Costs | 160,423 | 101,882 | 445,829 | 289,485 | |
Net income attributable to Parsons Corporation | 25,179 | 28,462 | 68,510 | 44,482 | |
Net income attributable to noncontrolling interests | $ 12,364 | $ 14,024 | $ 33,617 | $ 21,685 |
Investments in and Advances t_5
Investments in and Advances to Joint Ventures - Summary of Financial Information for Unconsolidated Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule Of Equity Method Investments [Line Items] | |||||
Current assets | $ 2,015,541 | $ 2,015,541 | $ 1,719,783 | ||
Total assets | 4,732,988 | 4,732,988 | 4,198,142 | ||
Current liabilities | 1,394,093 | 1,394,093 | 1,108,119 | ||
Total liabilities | 2,484,888 | 2,484,888 | 2,102,207 | ||
Total joint venture equity | 2,172,736 | 2,172,736 | 2,043,570 | ||
Investments in and advances to unconsolidated joint ventures | 164,858 | 164,858 | 107,425 | ||
Revenue | 1,418,571 | $ 1,134,370 | 3,948,523 | $ 3,092,160 | |
Costs | 1,124,305 | 872,423 | 3,109,713 | 2,388,095 | |
Net income attributable to Parsons Corporation | 47,447 | 29,571 | 116,241 | 68,533 | |
Equity in (losses) earnings of unconsolidated joint ventures | 10,262 | (974) | 4,497 | 10,237 | |
Unconsolidated Joint Ventures | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Current assets | 1,513,825 | 1,513,825 | 1,610,246 | ||
Noncurrent assets | 481,708 | 481,708 | 491,658 | ||
Total assets | 1,995,533 | 1,995,533 | 2,101,904 | ||
Current liabilities | 960,276 | 960,276 | 1,255,297 | ||
Noncurrent liabilities | 503,705 | 503,705 | 468,056 | ||
Total liabilities | 1,463,981 | 1,463,981 | 1,723,353 | ||
Total joint venture equity | 531,552 | 531,552 | 378,551 | ||
Investments in and advances to unconsolidated joint ventures | 164,858 | 164,858 | $ 107,425 | ||
Revenue | 634,937 | 782,880 | 1,514,561 | 1,762,420 | |
Costs | 581,041 | 774,030 | 1,474,991 | 1,711,555 | |
Net income attributable to Parsons Corporation | 53,896 | 8,850 | 39,570 | 50,865 | |
Unconsolidated Joint Ventures | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity in (losses) earnings of unconsolidated joint ventures | $ 10,262 | $ (974) | $ 4,497 | $ 10,237 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - Unconsolidated Joint Ventures - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 57.3 | $ 60.3 | $ 164.8 | $ 160.5 |
Reimbursable cost incurred | $ 38.8 | $ 42.1 | $ 118.5 | $ 113.8 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Consolidated Balance Sheet Related to Services Provided to Unconsolidated Joint Ventures (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Accounts receivable, net | $ 906,741 | $ 717,345 |
Contract assets | 756,630 | 634,033 |
Contract liabilities | 277,249 | 213,064 |
Unconsolidated Joint Ventures | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | 41,043 | 40,795 |
Contract assets | 40,032 | 30,578 |
Contract liabilities | $ 14,161 | $ 14,318 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Stock repurchase program commencement date | Aug. 12, 2021 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 48.3 | $ 48.3 | |||
Shares repurchases | 0 | 95,413 | 0 | 522,501 | |
Maximum | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Authorized shares of common stock value | $ 100 | ||||
Equity-based Awards | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share | 2,911 | 2,449 | 3,284 | 11,564 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Weighted Average Number of Shares Used To Compute Basic and Diluted EPS (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average number of shares outstanding | 104,970,645 | 103,608,135 | 104,894,448 | 103,684,048 |
Stock-based awards | 1,177,894 | 918,090 | 1,020,082 | 746,702 |
Convertible senior notes | 8,916,530 | 8,916,530 | 8,916,530 | 8,916,530 |
Diluted weighted average number of shares outstanding | 115,065,069 | 113,442,755 | 114,831,060 | 113,347,280 |
Earnings Per Share - Net Income
Earnings Per Share - Net Income Available to Shareholders to Compute Basic and Diluted EPS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Parsons Corporation | $ 47,447 | $ 29,571 | $ 116,241 | $ 68,533 |
Convertible senior notes if-converted method interest adjustment | 559 | 545 | 1,665 | 1,627 |
Diluted net income attributable to Parsons Corporation | $ 48,006 | $ 30,116 | $ 117,906 | $ 70,160 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Repurchase Program (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Total shares repurchased | 0 | 95,413 | 0 | 522,501 |
Total shares retired | 0 | 95,413 | 0 | 522,501 |
Average price paid per share | $ 0 | $ 41.42 | $ 0 | $ 37.32 |
Segment Information - Additiona
Segment Information - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 2 | ||||
Revenues | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 | |
Property and equipment, net | 99,344 | 99,344 | $ 96,050 | ||
United States | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,100,000 | $ 900,000 | 3,000,000 | $ 2,300,000 | |
Property and equipment, net | $ 85,200 | $ 85,200 | $ 84,400 |
Segment Information - Summary o
Segment Information - Summary of Business Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 |
Federal Solution Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 780,114 | 620,416 | 2,177,457 | 1,649,601 |
Critical Infrastructure | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 638,457 | $ 513,954 | $ 1,771,066 | $ 1,442,559 |
Segment Information - Summary_2
Segment Information - Summary of Adjusted EBITDA Business Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Adjusted EBITDA attributable to Parsons Corporation | ||||
Adjusted EBITDA attributable to Parsons Corporation | $ 115,227 | $ 88,549 | $ 302,308 | $ 232,307 |
Adjusted EBITDA attributable to noncontrolling interests | 12,606 | 14,138 | 34,222 | 22,042 |
Depreciation and amortization | (30,154) | (29,578) | (87,202) | (90,668) |
Interest expense, net | (8,120) | (5,941) | (20,778) | (14,168) |
Income tax expense | (15,218) | (13,792) | (41,944) | (27,643) |
Equity-based compensation expense | (9,075) | (7,125) | (25,092) | (15,814) |
Transaction-related costs | (5,493) | (2,563) | (9,028) | (14,486) |
Restructuring expense | (546) | (213) | ||
Other | 38 | (93) | (2,082) | (1,139) |
Net income including noncontrolling interests | 59,811 | 43,595 | 149,858 | 90,218 |
Net income attributable to noncontrolling interests | 12,364 | 14,024 | 33,617 | 21,685 |
Net income attributable to Parsons Corporation | 47,447 | 29,571 | 116,241 | 68,533 |
Federal Solution Segment | ||||
Adjusted EBITDA attributable to Parsons Corporation | ||||
Adjusted EBITDA attributable to Parsons Corporation | 65,039 | 61,004 | 206,827 | 151,287 |
Critical Infrastructure | ||||
Adjusted EBITDA attributable to Parsons Corporation | ||||
Adjusted EBITDA attributable to Parsons Corporation | $ 50,188 | $ 27,545 | $ 95,481 | $ 81,020 |
Segment Information - Summary_3
Segment Information - Summary of Revenues and Property and Equipment, Net by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 | |
Property and equipment, net | 99,344 | 99,344 | $ 96,050 | ||
North America | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,166,547 | 944,942 | 3,251,552 | 2,571,741 | |
Property and equipment, net | 92,279 | 92,279 | 91,217 | ||
Middle East | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 247,689 | 184,680 | 684,340 | 504,078 | |
Property and equipment, net | 7,065 | 7,065 | $ 4,833 | ||
Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 4,335 | $ 4,748 | $ 12,631 | $ 16,341 |
Segment Information - Summary_4
Segment Information - Summary of Revenues by Business Lines (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,418,571 | $ 1,134,370 | $ 3,948,523 | $ 3,092,160 |
Federal Solution Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 780,114 | 620,416 | 2,177,457 | 1,649,601 |
Federal Solution Segment | Defense And Intelligence | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 398,632 | 351,419 | 1,144,320 | 1,037,244 |
Federal Solution Segment | Engineered Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 381,482 | 268,997 | 1,033,137 | 612,357 |
Critical Infrastructure | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 638,457 | 513,954 | 1,771,066 | 1,442,559 |
Critical Infrastructure | Connected Communities | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208,446 | 184,288 | 561,512 | 517,725 |
Critical Infrastructure | Mobility Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 430,011 | $ 329,666 | $ 1,209,554 | $ 924,834 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - I.S. Engineers, LLC $ in Millions | 1 Months Ended |
Oct. 31, 2023 USD ($) | |
Subsequent Event [Line Items] | |
Percentage of ownership interest acquired | 100% |
Cash paid to acquire | $ 11.5 |