PARSONS CORP
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
PSN$48.90-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088219
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0000950170-24-118574
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 148 current paragraphs.
105 unchanged; 37 reworded; 6 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 28 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
The increase in awards for the three months ended September 30, 2024 compared to the corresponding period last year was primarily due to two significant awards in our Federal Solutions segment and a design award in our Critical Infrastructure segment.
Current report
BlackSignal Technologies, LLC
Current report
On August 16, 2024, the Company acquired a 100% ownership interest in BlackSignal Technologies, LLC, ("BlackSignal") a privately-owned company, for $203.8 million from cash on hand. Headquartered in Chantilly, Virginia, BlackSignal is a next-generation digital signal processing, electronic warfare, and cyber security provider built to counter near peer threats. Parsons believes that the acquisition will expand Parsons' customer base across the Department of Defense and Intelligence Community and significantly strengthen Parsons' positioning within cyber warfare, while adding new capabilities in the counterspace radio frequency domain. The financial results of BlackSignal have been included in our consolidated results of operations from August 16, 2024 onward.
Current report
Equity in losses of unconsolidated joint ventures for the nine months ended September 30, 2024 was $18.0 million compared to equity in earnings of consolidated joint ventures of $4.5 million for the nine months ended September 30, 2023, resulting in a decrease in equity in earnings of unconsolidated joint ventures of $22.5 million for the nine months ended September 20, 2024. The decrease in equity in earnings of unconsolidated joint ventures was primarily due to write-downs of $37.5 million during the nine months ended September 30, 2024 related to the joint venture discussed above. Equity in earnings of unconsolidated joint ventures for the nine months ended September 30, 2023 included earnings on higher margin change orders which did not reoccur for the nine months ended September 30, 2024. Joint venture volume has decreased year-over-year as we move away from our participation in construction joint ventures.
Current report
Income tax expense
Current report
The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily due to the increase in organic revenue noted above and a reduction in selling general, and administrative expenses as a percentage of revenue for the nine months ended September 30, 2024. These increases were offset by a contract write-down and the write-down in equity in losses from unconsolidated joint ventures discussed above. Equity in earnings of unconsolidated joint ventures for the three months ended September 30, 2023 included earnings on higher margin change orders which did not reoccur for the three months ended September 30, 2024.
Removed paragraphs (3)
Previous report
The increase in equity in losses of unconsolidated joint ventures for the six months ended June 30, 2024 compared to the corresponding period last year, was primarily due to write-downs of $30.8 million during the six months ended June 30, 2024 related to the joint venture discussed above. This compares to $11.3 million in write-downs from joint ventures for the six months ended June 30, 2023.The write-downs from joint ventures were offset by improved results in certain other joint ventures.
Previous report
Income tax (benefit) expense
Previous report
The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the six months ended June 30, 2024 compared to the corresponding period last year was primarily due to the factors discussed above for Adjusted EBITDA above for the three months ended June 30, 2024.
Reworded paragraphs (37)
Previous wording
Difference between our backlog of $8.8 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.2 billion, each as of June 30, 2024, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Current wording
Difference between our backlog of $8.8 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.7 billion, each as of September 30, 2024, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Previous wording
The decrease in awards for the three months ended June 30, 2024 compared to the corresponding period last year was primarily due to significant awards for the three months ended June 30, 2023 in our Federal Solutions segment from the Federal Aviation Administration and the General Services Administration. The increase in awards for the six months ended June 30, 2024 when compared to the corresponding period last year was primarily due to significant option period awards from a customer in our Federal Solutions segment offset by the awards discussed above for the three months ended June 30, 2023.
Current wording
The increase in awards for the nine months ended September 30, 2024 when compared to the corresponding period last year was primarily due to significant option period awards from a customer in our Federal Solutions segment offset by significant awards in our Federal Solutions segment from the Federal Aviation Administration and the General Services Administration for the nine months ended September 30, 2023.
Previous wording
Difference between our backlog of $8.8 billion and our RUPO of $6.2 billion, each as of June 30, 2024, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Current wording
Difference between our backlog of $8.8 billion and our RUPO of $6.7 billion, each as of September 30, 2024, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.
Previous wording
We expect to recognize $3.8 billion of our funded backlog at June 30, 2024 as revenues in the following twelve months. However, our U.S. federal government customers may cancel their contracts with us at any time through a termination for convenience or may elect to not exercise option periods under such contracts. In the case of a termination for convenience, we would not receive anticipated future revenues, but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed. See “Risk Factors—Risk Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue” in the Company’s Form 10-K for the year ended December 31, 2023.
Current wording
We expect to recognize $3.9 billion of our funded backlog at September 30, 2024 as revenues in the following twelve months. However, our U.S. federal government customers may cancel their contracts with us at any time through a termination for convenience or may elect to not exercise option periods under such contracts. In the case of a termination for convenience, we would not receive anticipated future revenues, but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed. See “Risk Factors—Risk Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue” in the Company’s Form 10-K for the year ended December 31, 2023.
Previous wording
On August 23, 2023, the Company acquired a 100% ownership interest in Sealing Technologies, Inc (“SealingTech”), a privately-owned company, for $179.3 million and up to an additional $25 million in the event an earn out revenue target is exceeded. 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. The financial results of SealingTech have been included in our consolidated results of operations from August 23, 2023 onward.
Current wording
On August 23, 2023, the Company acquired a 100% ownership interest in Sealing Technologies, Inc (“SealingTech”), a privately-owned company, for $176.0 million and up to an additional $25 million in the event an earn out revenue target is exceeded. 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. The financial results of SealingTech have been included in our consolidated results of operations from August 23, 2023 onward.
Previous wording
The significant change in the contract mix for the three and six months ended June 30, 2024 compared to the corresponding period last year relates to increased business volume from a significant fixed price contract in our Federal Solutions segment.
Current wording
The significant change in the contract mix for the three and nine months ended September 30, 2024 compared to the corresponding period last year relates to increased business volume from a significant fixed price contract in our Federal Solutions segment.
Previous wording
Our recognition of profit on long-term contracts requires the use of assumptions related to transaction price and total cost of completion. Estimates are continually evaluated as work progresses and are revised when necessary. When a change in estimated cost or transaction price is determined to have an impact on contract profit, we record a positive or negative adjustment to revenue.
Current wording
Our recognition of profit on long-term contracts requires the use of assumptions related to transaction price and total cost of completion. Estimates are continually evaluated as work progresses and are revised when necessary. When a change in estimated cost or transaction price is determined to have an impact on contract profit, we record a positive or negative adjustment to the consolidated statement of income.
Previous wording
We conduct a portion of our business through joint ventures or similar partnership arrangements. For the joint ventures we control, we consolidate all the revenues and expenses in our consolidated statements of income (including revenues and expenses attributable to noncontrolling interests). For the joint ventures we do not control, we recognize equity in (losses) earnings of unconsolidated joint ventures. Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended June 30, 2024 and June 30, 2023 of $50.5 million and $55.4 million, respectively, and $97.3 million and $106.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively.
Current wording
We conduct a portion of our business through joint ventures or similar partnership arrangements. For the joint ventures we control, we consolidate all the revenues and expenses in our consolidated statements of income (including revenues and expenses attributable to noncontrolling interests). For the joint ventures we do not control, we recognize equity in (losses) earnings of unconsolidated joint ventures. Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended September 30, 2024 and September 30, 2023 of $47.6 million and $57.3 million, respectively, and $144.9 million and $164.8 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.
Previous wording
Operating costs and expenses primarily include direct costs of contracts and selling, general and administrative expenses. Costs associated with compensation-related expenses for our people and facilities, which includes ESOP contribution expenses, are the most significant component of our operating expenses. Total ESOP contribution expense for the three months ended June 30, 2024 and June 30, 2023 was $15.1 million and $14.7 million, respectively, and $30.1 million and $29.2 million for the six months ended June 30, 2024 and June 30, 2023, respectively and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.”
Current wording
Operating costs and expenses primarily include direct costs of contracts and selling, general and administrative expenses. Costs associated with compensation-related expenses for our people and facilities, which includes ESOP contribution expenses, are the most significant component of our operating expenses. Total ESOP contribution expense for the three months ended September 30, 2024 and September 30, 2023 was $13.2 million and $14.9 million, respectively, and $43.4 million and $44.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.”
Previous wording
The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and six months ended June 30, 2024 and June 30, 2023.
Current wording
The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2024 and September 30, 2023.
Previous wording
The following table sets forth our results of operations for the three and six months ended June 30, 2024 and June 30, 2023 as a percentage of revenue.
Current wording
The following table sets forth our results of operations for the three and nine months ended September 30, 2024 and September 30, 2023 as a percentage of revenue.
Previous wording
Revenue increased $314.0 million for the three months ended June 30, 2024 when compared to the corresponding period last year, due to increases in revenue in both our Federal Solutions and Critical Infrastructure segments of $225.8 million and $88.2 million, respectively.
Current wording
Revenue increased $391.5 million for the three months ended September 30, 2024 when compared to the corresponding period last year, due to increases in revenue in both our Federal Solutions and Critical Infrastructure segments of $325.5 million and $66.1 million, respectively.
Previous wording
The increase in revenue for the six months ended June 30, 2024 when compared to the corresponding period last year, was due to increases in both our Federal Solutions and Critical Infrastructure segments of $500.9 million and $175.3 million, respectively.
Current wording
The increase in revenue for the nine months ended September 30, 2024 when compared to the corresponding period last year, was due to increases in both our Federal Solutions and Critical Infrastructure segments of $826.3 million and $241.4 million, respectively.
Previous wording
Direct cost of contracts increased $250.7 million for the three months ended June 30, 2024 when compared to the corresponding period last year, primarily due to an increase of $198.2 million in our Federal Solutions segment and $52.5 million in our Critical Infrastructure segment. The increase in direct costs of contracts in the Federal Solutions segment is primarily related to increased business volume from a significant contract. The increase in direct cost of contracts in the Critical Infrastructure segment are primarily related to increased volume from new and existing contracts. Direct costs of contracts for the three months ended June 30, 2023 included a $24.7 million write-down on a Critical Infrastructure contract.
Current wording
Direct cost of contracts increased $325.5 million for the three months ended September 30, 2024 when compared to the corresponding period last year, primarily due to an increase of $256.1 million in our Federal Solutions segment and $69.4 million in our Critical Infrastructure segment. The increase in direct costs of contracts in both the Federal Solutions and Critical Infrastructure segments was primarily related to increased volume from new and existing contracts.
Previous wording
The increase in direct cost of contracts for the six months ended June 30, 2024 when compared to the corresponding period last year, was primarily due to an increase of $425.9 million in our Federal Solutions segment and $118.5 million in our Critical Infrastructure segment. The increases for the six months ended June 30, 2024 compared to the corresponding period last year were primarily impacted by the factors noted above for both segments for the three months ended June 30, 2024.
Current wording
The increase in direct cost of contracts for the nine months ended September 30, 2024 when compared to the corresponding period last year, was primarily due to an increase of $682.0 million in our Federal Solutions segment and $187.9 million in our Critical Infrastructure segment. The increase for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily impacted by the factors noted above for both segments for the three months ended September 30, 2024.
Previous wording
Equity in losses of unconsolidated joint ventures increased $16.9 million for the three months ended June 30, 2024 compared to the corresponding period last year. Impacting equity in losses of unconsolidated joint ventures was a write-down of $22.4 million related to Parsons' participation in a design build joint venture. This compares to $7.0 million in write-downs from joint ventures for the three months ended June 30, 2023. The write-downs from joint ventures were partially offset by improved results in certain other joint ventures.
Current wording
Equity in earnings of unconsolidated joint ventures decreased $9.4 million for the three months ended September 30, 2024 compared to the corresponding period last year. Impacting equity in earnings of unconsolidated joint ventures for the three months ended September 30, 2024 was a write-down of $6.7 million related to Parsons' participation in a design build joint venture. Equity in earnings of unconsolidated joint ventures for the three months ended September 30, 2023 included earnings on higher margin change orders which did not reoccur for the three months ended September 30, 2024. Joint venture volume has decreased year-over-year as we move away from our participation in construction joint ventures.
Previous wording
As a percentage of revenue, SG&A decreased by 2.3% to 13.4% for the three months ended June 30, 2024 compared to 15.6% for the corresponding period last year.
Current wording
As a percentage of revenue, SG&A decreased by 2.0% to 13.6% for the three months ended September 30, 2024 compared to 15.6% for the corresponding period last year.
Previous wording
As a percentage of revenue, SG&A decreased by 2.4% to 13.9% for the six months ended June 30, 2024 compared to 16.3% for the corresponding period last year.
Current wording
As a percentage of revenue, SG&A decreased by 2.3% to 13.8% for the nine months ended September 30, 2024 compared to 16.0% for the corresponding period last year.
Previous wording
During the six months ended June 30, 2024, we paid $495.6 million in cash to repurchase $284.6 million aggregate principal amount of our Convertible Senior Notes due 2025 (the "Repurchase Transaction") concurrently with the offering of 2.625% Convertible Senior Notes due 2029. As a result of the Repurchase Transaction, we incurred a $211.0 million loss on debt extinguishment. The Repurchase Transaction is a partial repurchase of our Convertible Senior Notes due 2025. See“Note 10 – Debt and Credit Facilities,” for a further discussion of this transaction.
Current wording
During the nine months ended September 30, 2024, we paid $495.6 million in cash to repurchase $284.6 million aggregate principal amount of our Convertible Senior Notes due 2025 (the "Repurchase Transaction") concurrently with the offering of 2.625% Convertible Senior Notes due 2029. As a result of the Repurchase Transaction, we incurred a $211.0 million loss on debt extinguishment. The Repurchase Transaction is a partial repurchase of our Convertible Senior Notes due 2025. See“Note 10 – Debt and Credit Facilities,” for a further discussion of this transaction.
Previous wording
Interest income is related to interest earned on investments in government money funds. The increase in interest income for the three and six months ended June 30, 2024 is from higher cash balances held and increased interest rates compared to the corresponding periods last year.
Current wording
Interest income is related to interest earned on investments in government money funds. The increase in interest income for the three and nine months ended September 30, 2024 is from higher cash balances held and increased interest rates compared to the corresponding periods last year.
Previous wording
Interest expense for the three and six months ended June 30, 2024 is primarily due to debt related to our Convertible Senior Notes and Delayed Draw Term Loan. The increase in interest expense during the three months ended June 30, 2024 compared to the corresponding periods last year is primarily related to an increase in debt balances. The increase in interest expense for the six months ended June 30, 2024, compared to the corresponding period last year is primarily related to an increase in debt balances and a $3.2 million charge from the acceleration of the amortization of debt issuance costs associated with the partial repurchase of the 0.25% Convertible Senior Notes due 2025 discussed above.
Current wording
Interest expense for the three and nine months ended September 30, 2024 is primarily due to debt related to our Convertible Senior Notes and Delayed Draw Term Loan. The increase in interest expense during the three months ended September 30, 2024 compared to the corresponding periods last year is primarily related to an increase in debt balances. The increase in interest expense for the nine months ended September 30, 2024, compared to the corresponding period last year is primarily related to an increase in debt balances and a $3.2 million charge from the acceleration of the amortization of debt issuance costs associated with the partial repurchase of the 0.25% Convertible Senior Notes due 2025 discussed above.
Previous wording
The amounts in other income (expense), net for the three months ended June 30, 2024 are primarily related to transaction gains and losses on foreign currency transactions and sublease income and for the six months ended June 30, 2024 are primarily related to transaction gains and losses on foreign currency transactions, sublease income, and a change in the estimated fair value of contingent consideration.
Current wording
The amounts in other income (expense), net for the three months ended September 30, 2024 are primarily related to transaction gains and losses on foreign currency transactions and sublease income and for the nine months ended September 30, 2024 are primarily related to transaction gains and losses on foreign currency transactions, sublease income, and a change in the estimated fair value of contingent consideration.
Previous wording
The Company’s effective tax rate was 21.7% and 21.8% and income tax expense was $22.4 million and $15.2 million for the three months ended June 30, 2024 and June 30, 2023, respectively. The increase in tax expense for the three months ended June 30, 2024 compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income, an increased valuation allowance against deferred tax assets, and an increase in executive compensation subject to Section 162(m), partially offset by the increase in the foreign-derived intangible income (FDII) deduction.
Current wording
The Company’s effective tax rate was 20.8% and 20.3% and income tax expense was $22.5 million and $15.2 million for the three months ended September 30, 2024 and September 30, 2023, respectively. The increase in tax expense for the three months ended September 30, 2024 compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income, a remeasurement of its U.S. deferred tax assets and liabilities due to a change in state tax rate, a net increase of uncertain tax positions, and an increase in executive compensation subject to Section 162(m), partially offset by the increases in the foreign-derived intangible income (FDII) deduction and equity-based compensation.
Previous wording
The Company’s effective income tax rate (benefit) was 46.3% for the six months ended June 30, 2024 and the effective tax rate was 22.9% for the six months ended June 30, 2023. Income tax benefit was $9.8 million for the six months ended June 30, 2024 and income tax expense was $26.7 million for the six months ended June 30, 2023. The decrease in tax expense for the six months ended June 30, 2024 compared to the corresponding period last year was due primarily to the tax benefit resulting from the $211 million loss in partially unwinding Convertible Senior Notes during the first quarter 2024.
Current wording
The Company’s effective income tax rate was 14.6% and 21.9% for the nine months ended September 30, 2024 and September 30, 2023, respectively. Income tax expense was $12.7 million and $41.9 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. The decrease in tax expense for the nine months ended September 30, 2024 compared to the corresponding period last year was due primarily to the tax benefit resulting from the $211 million loss in partially unwinding Convertible Senior Notes during the first quarter 2024.
Previous wording
The increase in Federal Solutions revenue for the three months ended June 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 27% and $16.9 million from business acquisitions. Organic growth was due primarily from the ramp up of recent awards and growth on a significant contract. Revenue for the three months ended June 30, 2023 included incentive fees on two contracts of approximately $20 million that did not reoccur for the three months ended June 30, 2024.
Current wording
The increase in Federal Solutions revenue for the three months ended September 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 39% and $23.8 million from business acquisitions. Organic growth was primarily due to the ramp up of recent awards and growth on a significant contract, partially offset by the winding down of certain contracts.
Previous wording
The increase in Federal Solutions revenue for the six months ended June 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 33% and $33.8 million from business acquisitions. The increase in revenue for the six months ended June 30, 2024 compared to the corresponding period last year was primarily due to the factors impacting revenue discussed above for the three months ended June 30, 2024.
Current wording
The increase in Federal Solutions revenue for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 35% and $57.6 million from business acquisitions. The increase in organic revenue for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily due to the factors impacting revenue discussed above for the three months ended September 30, 2024. Revenue for the nine months ended September 30, 2023 included incentive fees on two contracts of approximately $20 million that did not reoccur for the nine months ended September 30, 2024.
Previous wording
The increase in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the six months ended June 30, 2024 compared to the corresponding period last year was primarily due to the factors discussed above for Adjusted EBITDA attributable to Parsons Corporation for the three months ended June 30, 2024.
Current wording
The increase in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily due to the factors discussed above for Adjusted EBITDA attributable to Parsons Corporation for the three months ended September 30, 2024 and the incentive fees on two contracts of approximately $20 million that did not reoccur for the nine months ended September 30, 2024.
Previous wording
The increase in Critical Infrastructure revenue for the three months ended June 30, 2024 compared to the corresponding periods last year was primarily related to organic growth of 15%. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards.
Current wording
The increase in Critical Infrastructure revenue for the three months ended September 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 10%. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards offset by the winding down of certain contracts and a write down on a contract of $21.6 million.
Previous wording
The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the three months ended June 30, 2024 compared to the corresponding period last year was primarily due to the revenue impacts discussed above and a reduction in selling general, and administrative expenses as a percentage of revenue for the three months ended June 30, 2024 compared to the corresponding period last year. Offsetting these increases were write-downs in equity in losses from unconsolidated joint ventures.
Current wording
The decrease in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the three months ended September 30, 2024 compared to the corresponding period last year was primarily due to a contract write-down along with the write-down in equity in losses from unconsolidated joint ventures discussed above. These decreases were offset by the increase in organic revenue and a reduction in selling general, and administrative expenses as a percentage of revenue for the three months ended September 30, 2024 compared to the corresponding period last year. Also impacting Adjusted EBITDA were higher margin change orders on an unconsolidated joint venture for the three months ended September 30, 2023 which did not reoccur in the three months ended September 30, 2024.
Previous wording
The increase in Critical Infrastructure revenue for the six months ended June 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 15% and $7.1 million from business acquisitions.
Current wording
The increase in Critical Infrastructure revenue for the nine months ended September 30, 2024 compared to the corresponding period last year was primarily related to organic growth of 13%. The increase in organic growth was primarily due to the factors noted above for the three months ended September 30, 2024.
Previous wording
Accounts receivable is the principal component of our working capital and includes billed and unbilled amounts. The total amount of our accounts receivable can vary significantly over time but is generally sensitive to revenue levels. We experience delays in collections from time to time from Middle East customers. Net days sales outstanding, which we refer to as Net DSO, is calculated by dividing (i) (accounts receivable plus contract assets) less (contract liabilities plus accounts payable) by (ii) average revenue per day (calculated by dividing trailing twelve months revenue by the number of days in that period). We focus on collecting outstanding receivables to reduce Net DSO and working capital. Net DSO was 60 days at June 30, 2024 down from 76 days at June 30, 2023. Our working capital (current assets less current liabilities) was $1.1 billion at June 30, 2024 and $726.6 million at December 31, 2023.
Current wording
Accounts receivable is the principal component of our working capital and includes billed and unbilled amounts. The total amount of our accounts receivable can vary significantly over time but is generally sensitive to revenue levels. We experience delays in collections from time to time from Middle East customers. Net days sales outstanding, which we refer to as Net DSO, is calculated by dividing (i) (accounts receivable plus contract assets) less (contract liabilities plus accounts payable) by (ii) average revenue per day (calculated by dividing trailing twelve months revenue by the number of days in that period). We focus on collecting outstanding receivables to reduce Net DSO and working capital. Net DSO was 51 days at September 30, 2024 down from 65 days at September 30, 2023. Our working capital (current assets less current liabilities) was $905.1 million at September 30, 2024 and $726.6 million at December 31, 2023.
Previous wording
Our cash and cash equivalents increased by $255.5 million to $528.5 million at June 30, 2024 from $272.9 million at December 31, 2023.
Current wording
Our cash and cash equivalents increased by $285.9 million to $558.8 million at September 30, 2024 from $272.9 million at December 31, 2023.
Previous wording
Net cash provided by operating activities increased $83.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The primary driver of the increase in cash flows provided by operating activities was an $142.8 million increase in net income after adjusting for non-cash items and debt extinguishment offset by an increase in cash outflows from our working capital accounts of $50.8 million (primarily from accounts payable, accrued expenses and other current liabilities, contract liabilities, and income taxes partially offset by accounts receivable, contract assets and prepaid expenses and other assets).
Current wording
Net cash provided by operating activities increased $179.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The primary driver of the increase in cash flows provided by operating activities was an $172.6 million increase in net income after adjusting for non-cash items and debt extinguishment offset by an increase in cash outflows from our working capital accounts of $30.0 million (primarily from accounts receivable, contract assets, prepaid expenses and other assets, and accounts payable offset by, contract liabilities, income taxes, and accrued expenses and other current liabilities) offset by a $23.3 change in cash used for other long-term liabilities.
Previous wording
Net cash used in investing activities increased $4.5 million for the six months ended June 30, 2024, when compared to the six months ended June 30, 2023. This change was primarily driven by a $45.5 million increase in investments in unconsolidated joint ventures offset by substantially no payments for acquisitions, net of cash acquired for the six months ended June 30, 2024 compared to $42.3 million in payments for acquisitions, net of cash acquired for the six months ended June 30, 2023.
Current wording
Net cash used in investing activities increased $17.4 million for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023. was primarily related to a $33.8 million increase in investments in unconsolidated joint ventures offset in part by a decrease of $16.6 million in payments for acquisitions, net of cash acquired.
Previous wording
Net cash (used in) provided by financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.
Current wording
Net cash provided by financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests.
Previous wording
Net cash provided by financing activities increased $261.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change in cash flows from financing activities is primarily driven by net cash inflows from our convertible bond transactions which generated $287.4 million in cash. See “Note 10 – Debt and Credit Facilities,” for a further discussion of these transactions.
Current wording
Net cash provided by financing activities increased $181.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change in cash flows from financing activities is primarily driven by net cash inflows from our convertible bond transactions which generated $287.4 million in cash. See “Note 10 – Debt and Credit Facilities,” for a further discussion of these transactions. This increase was offset in part by net repayments of borrowings under the credit agreement of $75 million.
Previous wording
We have in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees. Letters of credit commitments outstanding under these bank lines aggregated to $303.6 million as of June 30, 2024. Letters of credit outstanding under the Credit Agreement total $43.0 million as of June 30, 2024.
Current wording
We have in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees. Letters of credit commitments outstanding under these bank lines aggregated to $309.1 million as of September 30, 2024. Letters of credit outstanding under the Credit Agreement total $43.0 million as of September 30, 2024.