Earnings Per Share

9 Months Ended

Sep. 30, 2024

17.

Earnings Per Share

Basic earnings per share (“EPS”) is computed using the weighted average number of shares outstanding during the period and income available to shareholders. Diluted EPS includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the if-converted method for Convertible Debt and the treasury stock method for all other instruments.

Under the treasury stock method, the weighted average number of shares outstanding is adjusted to reflect the dilutive effects of stock-based awards and shares underlying the warrants related to the convertible senior notes due 2025.

Under the if-converted method:

Convertible Senior Notes due 2025:

Income available to shareholders is adjusted to add back interest expense, after tax (unless antidilutive).

Weighted average number of shares outstanding is adjusted to include the shares underlying the convertible debt (unless antidilutive).

Shares underlying the bond hedge (unless antidilutive).

Convertible Senior Notes due 2029:

Interest has been excluded from the numerator and no shares have been included in the denominator of diluted EPS, as the principal amount of convertible debt will be settled in cash with any excess conversion value settled in cash or shares of common stock.

Excludes shares underlying the capped call as the shares are antidilutive.

The following tables reconcile the denominator and numerator used to compute basic EPS to the denominator and numerator used to compute diluted EPS for the three and nine months ended September 30, 2024 and September 30, 2023 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Numerator for Basic and Diluted EPS:
Net income attributable to Parsons Corporation - basic	$	71,951	$	47,447	$	33,768	$	116,241
Convertible senior notes if-converted method interest adjustment		54		559		-		1,665
Net income attributable to Parsons Corporation - diluted	$	72,005	$	48,006	$	33,768	$	117,906

Denominator for Basic and Diluted EPS:
Basic weighted average number of shares outstanding		106,291		104,971		106,211		104,894
Dilutive effect of stock-based awards		1,661		1,178		1,628		1,020
Dilutive effect of warrants		561		—		358		—
Dilutive effect of convertible senior notes due 2025		2,573		8,917		—		8,917
Diluted weighted average number of shares outstanding		111,086		115,066		108,197		114,831

Earnings per share:
Basic	$	0.68	$	0.45	$	0.32	$	1.11
Diluted	$	0.65	$	0.42	$	0.31	$	1.03

Anti-dilutive stock-based awards excluded from the calculation of earnings per share for the three months ended September 30, 2024 and September 30, 2023 were 949 and 2,911, respectively and for the nine months ended September 30, 2024 and September 30, 2023 were 4,497 and 3,284, respectively.

If-converted interest adjustment of $2.9 million and potential share issuances of 3,982,928 shares under the Company's convertible senior notes due 2025 were excluded from the computation of diluted earnings per share for the nine months ended September 30, 2024 as their inclusion would be anti-dilutive.

Share Repurchases

On August 9, 2021, the Company’s Board of Directors authorized the Company to acquire a number of shares of Common Stock having an aggregate market value of not greater than $100 million from time to time, commencing on August 12, 2021. The Board further amended this authorization in August 2022 to remove the prior expiration date and grant executive leadership the discretion to determine the price for such share repurchases. The Board further amended this authorization in February 2024 to restore the repurchase capacity to $100 million and removed the $25 million quarterly cap on such repurchases.

At the time of the February 2024 authorization, the Company had repurchased shares with an aggregated market value (including fees) of $54.7 million. The aggregate market value of shares of Common Stock the Company is authorized to acquire, from both the August 2021 and February 2024 authorizations, is not greater than $154.7 million.

As of September 30, 2024, the Company has $90 million remaining under the stock repurchase program.

Repurchased shares of common stock are retired and included in “Repurchases of common stock” in cash flows from financing activities in the Consolidated Statements of Cash Flows. The primary purpose of the Company’s share repurchase program is to reduce the dilutive effect of shares issued under the Company’s ESOP and other stock benefit plans. 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.

The following table summarizes the repurchase activity under the stock repurchase program:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Total shares repurchased		-		-		131,053		185,475
Total shares retired		-		-		131,053		185,475
Average price paid per share	$	-	$	-	$	76.30	$	43.13