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Segments Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segments Information

20.

Segments 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”), currently its 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 information for the periods presented (in thousands):

 

 

 

2022

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Federal Solutions

 

$

2,212,987

 

 

$

1,888,050

 

 

$

1,911,910

 

Critical Infrastructure

 

 

1,982,285

 

 

 

1,772,721

 

 

 

2,007,036

 

Total revenues

 

$

4,195,272

 

 

$

3,660,771

 

 

$

3,918,946

 

 

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, 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 summarizes business segment Adjusted EBITDA and a reconciliation to net income attributable to Parsons Corporation for the periods presented (in thousands):

 

 

 

2022

 

 

2021

 

 

2020

 

Adjusted EBITDA attributable to Parsons Corporation

 

 

 

 

 

 

 

 

 

 

 

 

Federal Solutions

 

$

199,004

 

 

$

162,733

 

 

$

167,340

 

Critical Infrastructure

 

 

123,385

 

 

 

121,700

 

 

 

154,528

 

Adjusted EBITDA attributable to Parsons

   Corporation

 

 

322,389

 

 

 

284,433

 

 

 

321,868

 

Adjusted EBITDA attributable to noncontrolling

   interests

 

 

30,393

 

 

 

25,287

 

 

 

20,753

 

Depreciation and amortization

 

 

(120,501

)

 

 

(144,209

)

 

 

(127,980

)

Interest expense, net

 

 

(22,219

)

 

 

(17,301

)

 

 

(20,169

)

Income tax (expense) benefit

 

 

(39,657

)

 

 

(23,636

)

 

 

(42,492

)

Equity-based compensation

 

 

(24,354

)

 

 

(19,601

)

 

 

(9,785

)

Transaction-related costs (a)

 

 

(16,270

)

 

 

(11,965

)

 

 

(19,922

)

Restructuring (b)

 

 

(213

)

 

 

(736

)

 

 

(2,193

)

Other (c)

 

 

(3,003

)

 

 

(3,320

)

 

 

(1,159

)

Net income including noncontrolling

   interests

 

$

126,565

 

 

$

88,952

 

 

$

118,921

 

Net income attributable to noncontrolling interests

 

 

(29,901

)

 

 

(24,880

)

 

 

(20,380

)

Net income attributable to Parsons

   Corporation

 

$

96,664

 

 

$

64,072

 

 

$

98,541

 

 

(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 and related to our 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 table presents revenues and property and equipment, net by geographic area (in thousands):

 

 

 

2022

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

3,463,128

 

 

$

3,028,760

 

 

$

3,215,874

 

Middle East

 

 

710,830

 

 

 

610,655

 

 

 

684,353

 

Rest of World

 

 

21,314

 

 

 

21,356

 

 

 

18,719

 

Total revenues

 

$

4,195,272

 

 

$

3,660,771

 

 

$

3,918,946

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

91,217

 

 

$

100,674

 

 

$

116,460

 

Middle East

 

 

4,833

 

 

 

3,522

 

 

 

4,567

 

Total property and equipment, net

 

$

96,050

 

 

$

104,196

 

 

$

121,027

 

 

North America revenue includes $3.2 billion, $2.7 billion and $3.0 billion of United States revenue for the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively. North America property and equipment, net includes $84.4 million, $95.0 million and $109.6 million of property and equipment, net in the United States at December 31, 2022, December 31, 2021 and December 31, 2020, respectively.

The geographic location of revenue is determined by the location of the customer.  The prior reporting of revenue by geographic location has been conformed to the current presentation.

 

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

 

 

 

2022

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Defense & Intelligence

 

$

1,368,779

 

 

$

1,269,030

 

 

$

1,205,152

 

Engineered Systems

 

 

844,208

 

 

 

619,020

 

 

 

706,758

 

Federal Solutions revenues

 

 

2,212,987

 

 

 

1,888,050

 

 

 

1,911,910

 

Mobility Solutions

 

 

1,291,088

 

 

 

1,164,718

 

 

 

1,280,535

 

Connected Communities

 

 

691,197

 

 

 

608,003

 

 

 

726,501

 

Critical Infrastructure revenues

 

 

1,982,285

 

 

 

1,772,721

 

 

 

2,007,036

 

Total revenues

 

$

4,195,272

 

 

$

3,660,771

 

 

$

3,918,946

 

 

 

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. Effective January 1, 2022, the Company made changes to its Critical Infrastructure business units by transferring a portion of legacy Mobility Solutions to the Connected Communities business unit. Effective June 1, 2022, the Company made changes to its Federal Solutions business units by transferring a portion of legacy Defense and Intelligence business unit to the Engineered Systems business unit. The prior year information in the table above has been reclassified to conform to the business line changes.