XML 38 R25.htm IDEA: XBRL DOCUMENT v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2021
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 Chairman 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, 2021

 

 

September 30, 2020

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Federal Solutions revenue

 

$

499,291

 

 

$

498,156

 

 

 

$

1,394,035

 

 

$

1,457,937

 

Critical Infrastructure revenue

 

 

456,759

 

 

 

506,080

 

 

 

 

1,316,068

 

 

 

1,496,751

 

Total revenue

 

$

956,050

 

 

$

1,004,236

 

 

 

$

2,710,103

 

 

$

2,954,688

 

 

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, 2021

 

 

September 30, 2020

 

 

 

September 30, 2021

 

 

September 30, 2020

 

     Federal Solutions

 

$

46,481

 

 

$

45,874

 

 

 

$

110,963

 

 

$

125,191

 

     Critical Infrastructure

 

 

30,371

 

 

 

48,856

 

 

 

 

89,845

 

 

 

111,732

 

Adjusted EBITDA attributable to Parsons Corporation

 

 

76,852

 

 

 

94,730

 

 

 

 

200,808

 

 

 

236,923

 

Adjusted EBITDA attributable to noncontrolling interests

 

 

7,540

 

 

 

6,071

 

 

 

 

18,010

 

 

 

15,535

 

Depreciation and amortization

 

 

(37,232

)

 

 

(30,952

)

 

 

 

(106,540

)

 

 

(95,442

)

Interest expense, net

 

 

(3,987

)

 

 

(5,387

)

 

 

 

(13,188

)

 

 

(13,144

)

Income tax expense

 

 

(9,165

)

 

 

(16,017

)

 

 

 

(18,378

)

 

 

(32,992

)

Equity-based compensation expense

 

 

(3,224

)

 

 

991

 

 

 

 

(15,125

)

 

 

(4,142

)

Transaction-related costs (a)

 

 

(2,537

)

 

 

(2,411

)

 

 

 

(9,269

)

 

 

(11,937

)

Restructuring expense (b)

 

 

(357

)

 

 

(365

)

 

 

 

(507

)

 

 

(1,475

)

Other (c)

 

 

(1,121

)

 

 

(140

)

 

 

 

(3,001

)

 

 

(1,310

)

Net income including noncontrolling interests

 

 

26,769

 

 

 

46,520

 

 

 

 

52,810

 

 

 

92,016

 

Net income attributable to noncontrolling interests

 

 

7,411

 

 

 

5,862

 

 

 

 

17,711

 

 

 

15,086

 

Net income attributable to Parsons Corporation

 

$

19,358

 

 

$

40,658

 

 

 

$

35,099

 

 

$

76,930

 

 

(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, 2021

 

 

September 30, 2020

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

804,122

 

 

$

831,367

 

 

 

$

2,245,515

 

 

$

2,429,357

 

Middle East

 

 

147,207

 

 

 

168,043

 

 

 

 

448,525

 

 

 

511,591

 

Rest of World

 

 

4,721

 

 

 

4,826

 

 

 

 

16,063

 

 

 

13,740

 

Total Revenue

 

$

956,050

 

 

$

1,004,236

 

 

 

$

2,710,103

 

 

$

2,954,688

 

The geographic location of revenue is determined by the location of the customer.

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Property and Equipment, Net

 

 

 

 

 

 

 

 

North America

 

$

102,352

 

 

$

116,460

 

Middle East

 

 

3,543

 

 

 

4,567

 

Total Property and Equipment, Net

 

$

105,895

 

 

$

121,027

 

 

 

North America includes revenue in the United States for the three months ended September 30, 2021 and September 30, 2020 of $730.7 million and $774.0 million, respectively, and for the nine months ended September 30, 2021 and September 30, 2020 of $2.0 billion and $2.2 billion, respectively.  North America property and equipment, net includes $96.7 million and $109.6 million of property and equipment, net in the United States at September 30, 2021 and December 31, 2020, respectively.

The following table presents revenues by business units (in thousands):

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defense and Intelligence

 

$

343,151

 

 

$

333,289

 

 

 

$

962,642

 

 

$

953,755

 

Engineered Systems

 

 

156,140

 

 

 

164,867

 

 

 

 

431,393

 

 

 

504,182

 

Federal Solutions revenues

 

 

499,291

 

 

 

498,156

 

 

 

 

1,394,035

 

 

 

1,457,937

 

Connected Communities

 

 

91,902

 

 

 

116,366

 

 

 

 

263,106

 

 

 

316,626

 

Mobility Solutions

 

 

364,857

 

 

 

389,714

 

 

 

 

1,052,962

 

 

 

1,180,125

 

Critical Infrastructure revenues

 

 

456,759

 

 

 

506,080

 

 

 

 

1,316,068

 

 

 

1,496,751

 

Total Revenue

 

$

956,050

 

 

$

1,004,236

 

 

 

$

2,710,103

 

 

$

2,954,688

 

 

Effective July 1, 2021, the Company made changes to its Federal Solutions business units by consolidating Space & Geospatial Solutions, Cyber & Intelligence, and Missile Defense & C5ISR into a new Defense and Intelligence business unit. The prior year information in the table above has been reclassified to conform to the business line changes.