10q10k10q10k.net

What changed in PARSONS CORP's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of PARSONS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+399 added−394 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-14)

Top changes in PARSONS CORP's 2024 10-K

399 paragraphs added · 394 removed · 333 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

133 edited+15 added−15 removed108 unchanged
Biggest changeShe serves on one non-profit company board, the Professional Services Council, and she is a National Association of Corporate Directors (NACD) Directorship (NCADD.DC) and Cyber Certified. Ms. Smith received an honorary doctorate degree from Ohio Northern University, a Master of Science degree in electrical engineering from Syracuse University and a bachelor-of-science in electrical engineering from Ohio Northern University.
Biggest changeSmith received an honorary doctorate degree from Ohio Northern University, a Master of Science degree in electrical engineering from Syracuse University and a bachelor-of-science in electrical engineering from Ohio Northern University. She received the GovCon Executive of the Year award in 2023 and Parsons received GovCon Company of the Year Award in 2024. Ms.
The below trends are key growth drivers in both our Federal Solutions and Critical Infrastructure segments. Defense Spending Remains a Priority of the national agenda due to the reemergence of long-term strategic peer competition, which has been cited in the National Defense Strategy as the primary concern for U.S. national prosperity and security.
The below trends are key growth drivers in both our Federal Solutions and Critical Infrastructure segments. Defense Spending Remains a Priority of the U.S. national agenda due to the reemergence of long-term strategic peer competition, which has been cited in the National Defense Strategy as the primary concern for U.S. national prosperity and security.
We are subject to U.S. export control laws and regulations, including the International Traffic in Arms Regulations, or ITAR, and the Export Administration Regulations, or EAR, as well as U.S. economic and trade sanctions, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC.
International Trade . We are subject to U.S. export control laws and regulations, including the International Traffic in Arms Regulations, or ITAR, and the Export Administration Regulations, or EAR, as well as U.S. economic and trade sanctions, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC.
We seek to enhance and optimize our core business and improve our financial performance, including revenue growth, margin expansion and positive cash flow, using the following strategies: • Developing a company-wide agile framework to enable responsive solutions delivery • Promoting collaboration and cross-company sharing to drive informed, timely decision making • Aligning goals through shared one-company objectives and a focus on timely feedback to ensure opportunities for improvement are realized and executed • Using digital transformation to improve our internal processes and deliver an improved customer experience • Cross-selling new solutions to our existing customers and existing solutions to new customers. • Promoting a culture that enables employees to drive technology and business model innovation • Streamlining operations and processes to optimize performance delivery and reduce overhead expenditures • Rigorously managing our working capital to maximize cash flow • Committing to being a responsible corporation for both Parsons and our customers 13 Top Positions in High-Growth, Sustainable Markets We have a balanced portfolio between national security and critical infrastructure and diverse range of end markets.
We seek to enhance and optimize our core business and improve our financial performance, including revenue growth, margin expansion and positive cash flow, using the following strategies: • Developing a company-wide agile framework to enable responsive solutions delivery • Promoting collaboration and cross-company sharing to drive informed, timely decision making • Aligning goals through shared one-company objectives and a focus on timely feedback to ensure opportunities for improvement are realized and executed • Using digital transformation to improve our internal processes and deliver an improved customer experience • Cross-selling new solutions to our existing customers and existing solutions to new customers 13 • Promoting a culture that enables employees to drive technology and business model innovation • Streamlining operations and processes to optimize performance delivery and reduce overhead expenditures • Rigorously managing our working capital to maximize cash flow • Committing to being a responsible corporation for Parsons and our customers Top Positions in High-Growth, Sustainable Markets We have a balanced portfolio between national security and critical infrastructure and a wide range of end markets.
Xator also 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, increasing our addressable market in both the Federal Solutions and Critical Infrastructure segments. • Echo Ridge LLC: Acquired on July 30, 2021 at a purchase price of $9 million.
Xator also 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, increasing our addressable market in both the Federal Solutions and Critical Infrastructure segments. 11 • Echo Ridge LLC: Acquired on July 30, 2021 at a purchase price of $9 million.
Program Management: We provide expertise and technology to advance our customers’ execution of large, complex projects within their defined sustainability, technical, quality, time and cost parameters. Design Engineering: We provide advanced systems and infrastructure engineering design associated with utility capital projects, water/wastewater treatment, environmental remediation, ammunition plant upgrades, roads and highways, bridges, rail and transit systems and other associated infrastructure.
Program Management: We provide expertise and technology to advance our customers’ execution of large, complex projects within their defined, technical, quality, time and cost parameters. Design Engineering: We provide advanced systems and infrastructure engineering design associated with utility capital projects, water/wastewater treatment, environmental remediation, ammunition plant upgrades, roads and highways, bridges, rail and transit systems, and other associated infrastructure.
Representative offerings include weapons of mass destruction elimination, munitions destruction; remediation of unexploded ordinances and hazardous, toxic, reactive wastes; architectural and engineering design; program and project management; infectious disease control; advanced electronic security systems; border security; counter-unmanned aircraft systems; and biometrics solutions. • Our expertise includes designing and upgrading processing and production facilities such as Army ammunition, technology deployment in response to pandemic outbreaks, and 4 delivery of solutions addressing resiliency, security and sustainability, as well as delivery of highly complex infrastructure in challenging environments and geographies. • Representative programs include the National Science Foundation’s Antarctica Infrastructure Modernization for Science, the FAA Technical Services Contract, the DTRA Cooperative Threat Reduction Integrating Contract, the Department of State Overseas Security Installation Services, and the Radford Army Munition Plant Energetic Waste Incinerator.
Representative offerings include weapons of mass destruction elimination, munitions destruction; remediation of unexploded ordinances and hazardous, toxic, reactive wastes; architectural and engineering design; program and construction management; infectious disease control; advanced electronic security systems; border security; counter-unmanned aircraft systems; and biometrics solutions. • Our expertise includes designing and upgrading processing and production facilities such as Army ammunition, technology deployment in response to pandemic outbreaks, and delivery of solutions addressing resiliency, security and sustainability, as well as delivery of highly-complex infrastructure in challenging environments and geographies. • Representative programs include the National Science Foundation’s Antarctica Infrastructure Modernization for Science, the FAA Technical Services Contract, the 4 DTRA Cooperative Threat Reduction Integrating Contract, the Department of State Overseas Security Installation Services, and the Radford Army Munition Plant Energetic Waste Incinerator.
The DRIVE program is comprised of nine distinct award levels, each with its own criteria, workflow, and rewards – some monetary and some non-monetary. The program is open to all part- and full-time employees around the globe, and awards can be distributed from supervisor to team or team member, individual contributor to supervisor, and from peer to peer.
The DRIVE program is comprised of nine distinct 16 award levels, each with its own criteria, workflow, and rewards – some monetary and some non-monetary. The program is open to all part- and full-time employees around the globe, and awards can be distributed from supervisor to team or team member, individual contributor to supervisor, and from peer to peer.
Our customers include state and local governments, Fortune 100 companies, smart city developers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles and New York, states and provinces, and rail and transit entities, including AMTRAK, CSX, Metrolinx (Ontario Canada), and WMATA.
Our customers include state and local governments, Fortune 100 companies, utility companies, smart city developers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles and New York, states and provinces, and rail and transit entities, including Amtrak, CSX, Metrolinx (Ontario Canada), and WMATA.
Industry participants that have the capability to embrace these new technologies to enhance their capability and service offering to higher value solutions will be well positioned to assist governments and communities in their transformation. Change equals opportunity, and Parsons is well-positioned to serve a large array of diverse global customers.
Industry participants that have the capability to embrace these new technologies to enhance their capability and service offering to higher value solutions will be well positioned to assist governments and communities in their transformation. Change equals opportunity, and Parsons is well-positioned to serve a large array of global customers.
The amendment provides that, with respect to all diversifications elected or processed after January 1, 2021, the definition of a qualified participant shall mean a participant who has attained the age of 50 and who has completed at least three years of participation in the ESOP and other criteria.
The amendment provides that, with respect to all diversifications elected or processed after January 1, 2021, the definition of a qualified participant shall mean a participant who has attained the age of 50 and who 17 has completed at least three years of participation in the ESOP and other criteria.
Kolloway served as Deputy General Counsel – Americas from March 2016 through October 2017. Before joining Parsons, Mr. Kolloway served as Senior Vice President and Assistant General Counsel for Operations and Risk Management at AECOM 21 Technology Corporation, a publicly traded company. Prior to his tenure at AECOM, Mr.
Kolloway served as Deputy General Counsel – Americas from March 2016 through October 2017. Before joining Parsons, Mr. Kolloway served as Senior Vice President and Assistant General Counsel for Operations and Risk Management at AECOM Technology Corporation, a publicly traded company. Prior to his tenure at AECOM, Mr.
Leverage technology to drive smart, sustainable infrastructure. o Environmental remediation – Leverage our specialized skill and experience with respect to remediating mines and oil wells and eliminating emerging contaminants. Apply our design capabilities and innovative technologies to modernize, upgrade and create new water/wastewater treatment systems.
Leverage technology to drive smart infrastructure. o Environmental remediation – Leverage our specialized skill and experience with respect to remediating mines and oil wells and eliminating emerging contaminants. Apply our design capabilities and innovative technologies to modernize, upgrade and create new water/wastewater treatment systems.
We compete on the basis of our technical expertise, technological innovation, our ability to deliver cost-effective multi-faceted solutions and services in a timely manner, our reputation and relationships with our customers, qualified and/or security-clearance personnel, and pricing.
We compete on the basis of our technical expertise, technological innovation, our ability to deliver cost-effective multi-faceted solutions and services in a timely manner, our reputation and 15 relationships with our customers, qualified and/or security-clearance personnel, and pricing.
For 80 years, we have solved our customers’ most challenging problems and enabled a safer, smarter, more secure, and more connected world thanks to a culture of innovation, a focus on delivery, and a mission-focused workforce.
For more than 80 years, we have solved our customers’ most challenging problems and enabled a safer, smarter, more secure, and more connected world thanks to a culture of innovation, a focus on delivery, and a mission-focused workforce.
We design and lead the delivery of complex infrastructure projects, leveraging our expertise as a leader in bridges, transportation, and urban development to support customers in programs that are 1 transforming the global landscape.
We design and lead the delivery of complex infrastructure projects, leveraging our expertise as a leader in bridges, transportation, and urban development to support customers in programs that are transforming the global landscape.
Liability under RCRA is strict and, under certain circumstances, joint and several, so that any responsible party may be held liable 20 for the entire cost of investigating and remediating the release of hazardous substances.
Liability under RCRA is strict and, under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances.
We utilize the following strategies, among others, towards achieving this goal: • We continuously evaluate and shape our portfolio to divest, exit and de-emphasize lower-performing businesses and markets. • We invest in critical, differentiated technology areas, including artificial intelligence, assured position navigation and timing, PFAS remediation, space cyber/electronic warfare, quantum research and product development in areas including defensive cyber, space command and control, intelligent transportation systems, spectrum operations and biometrics. • We seek continuous expansion in our focused high-growth markets: o Cybersecurity and Intelligence – Continue our growth momentum by offering end-to-end full spectrum cyber operations including solutions, tools, operations and platforms for our U.S.
We utilize the following strategies, among others, towards achieving this goal: • We continuously evaluate and shape our portfolio to divest, exit and de-emphasize lower-performing businesses and markets. • We invest in critical, differentiated technology areas, including artificial intelligence, assured position navigation and timing, PFAS remediation, space cyber/electronic warfare, and product development in areas including defensive cyber, space command and control, intelligent transportation systems, spectrum operations and biometrics. • We seek continuous expansion in our focused high-growth markets: o Cyber and Intelligence – Continue our growth momentum by offering end-to-end full spectrum cyber operations including solutions, tools, operations and platforms for our U.S.
The Resource Conservation and Recovery Act, or RCRA, regulates the generation, treatment, storage, handling, transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste.
The Resource Conservation and Recovery Act, or RCRA, regulates the generation, treatment, storage, 20 handling, transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste.
Parsons is focused on the risks and opportunities associated with climate change. In 2023, Parsons elected to disclose information related to our climate-related governance, risk management and metrics utilizing the Task Force on Climate-Related Financial Disclosures (TCFD) framework. We conducted climate risk and opportunity workshops with senior leaders representing a cross-section of our geographies, markets and corporate functions.
Parsons is focused on the risks and opportunities associated with climate change. In 2024, Parsons elected to disclose information related to our climate-related governance, risk management and metrics utilizing the Task Force on Climate-Related Financial Disclosures (TCFD) framework. We conducted climate risk and opportunity workshops with senior leaders representing a cross-section of our geographies, markets and corporate functions.
Our client base includes top tier public authorities and state-owned developers across different markets from city-scale developments to major city-wide infrastructure schemes. • Our extensive planning and design capabilities enable us to lead key infrastructure and development projects, including Dubai’s Integrated Traffic System design and operation to enable traffic optimization and efficiency, Doha City area transport infrastructure projects to increase capacity and reduce congestion, Abu Dhabi’s Mid-Island Parkway connecting multiple islands for future sustainable developments, Green Riyadh landscape and infrastructure design for increased urban green space, and Denmark’s Banedanmark Rail Signaling Program to enable better centralized traffic control, energy optimization, and reduced delays. • Parsons has a long-standing program management legacy in the Middle East for infrastructure, mega cities, and urban development.
Our client base includes top tier public authorities and state-owned developers across different markets from city-scale developments to major city-wide infrastructure schemes. • Our extensive planning and design capabilities enable us to lead key infrastructure and development projects, including Dubai’s Integrated Traffic System design and operation to enable traffic optimization and efficiency, and transportation infrastructure projects to increase capacity and reduce congestion, Abu Dhabi’s Mid-Island Parkway connecting multiple islands for future sustainable developments, Green Riyadh landscape and infrastructure design for increased urban green space, and Denmark’s Banedanmark Rail Signaling Program to enable better centralized traffic control, energy optimization, and reduced delays. • Parsons has a long-standing program management legacy in the Middle East for infrastructure, mega cities, and urban development.
This data is critical in guiding our cultural journey to become a more dynamic, entrepreneurial, and creative place to work. This year, we saw some of our highest participation rates among our business groups and functions, with an overall response of 54 percent, which is higher than last year’s overall rate of 48 percent.
This data is critical in guiding our cultural journey to become a more dynamic, entrepreneurial, and creative place to work. This year, we saw some of our highest participation rates among our business groups and functions, with an overall response of 60 percent, which is higher than last year’s overall rate of 54 percent.
Ofilos holds a Master of Business Administration from Boston University and a Bachelor of Science from Babson College. Michael R. Kolloway, age 63, was appointed General Counsel and Corporate Secretary of Parsons Corporation in October 2017 and later became our Chief Legal Officer in January 2019. Before assuming the role of General Counsel and Corporate Secretary, Mr.
Ofilos holds a Master of Business Administration from Boston University and a Bachelor of Science from Babson College. Michael R. Kolloway, age 64, was appointed General Counsel and Corporate Secretary of Parsons Corporation in October 2017 and later became our Chief Legal Officer in January 2019. Before assuming the role of General Counsel and Corporate Secretary, Mr.
The work of our diverse and collaborative, highly skilled and dedicated employees has enabled our long track record of continued innovation and execution on behalf of our customers.
The work of our collaborative, highly skilled and dedicated employees has enabled our long track record of continued innovation and execution on behalf of our customers.
Our six core markets, including cybersecurity and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development require leading-edge technologies and extensive technical know-how, and necessitate consistently exceptional performance, thus further entrenching us with our key customers and driving our long-term relationships.
Our six core markets, including cyber and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development require leading-edge technologies and extensive technical know-how, and necessitate consistently exceptional performance, thus further entrenching us with our key customers and driving our long-term relationships.
Critical Infrastructure: Our Critical Infrastructure segment provides program management, design and engineering services, and owners representative support for complex physical and digital infrastructure around the globe. We develop digital solutions focused on next generation aviation; rail and transit; bridges, roads and highways; leveraging sensors and data to drive smart sustainable infrastructure.
Critical Infrastructure: Our Critical Infrastructure segment provides program management, design and engineering services, and owners representative support for complex physical and digital infrastructure around the globe. We develop digital solutions focused on next generation aviation; rail and transit; bridges, roads and highways; and leverage sensors and data to drive smart sustainable infrastructure.
We recognize the importance of driving business focus and will resource/invest in areas where we believe Parsons can have a top position in markets that are high-growth, profitable, and enduring. These include cybersecurity and intelligence, space and missile defense, transportation, environmental remediation, and urban development.
We recognize the importance of driving business focus and will resource/invest in areas where we believe Parsons can have a top position in markets that are high-growth, profitable, and enduring. These include cyber and intelligence, space and missile defense, transportation, environmental remediation, and urban development.
SealingTech expands Parsons’ customer base across the Department of Defense and Intelligence Communities and further enhances Parsons’ 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 that protects national security. • IPKeys Power Partners, Inc.: Acquired on March 13, 2023 for a total purchase price of $43 million.
SealingTech expands Parsons’ customer base across the Department of Defense and Intelligence Communities and further enhances Parsons’ 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 that protects national security. • IPKeys Power Partners, Inc.: Acquired on April 13, 2023 for a total purchase price of $43.0 million.
Cyber Command, and DOD research laboratories. ▪ Our tools and products are used across a wide variety of electronic warfare operations, including commercial cellular survey, automated signal identification and characterization using Artificial Intelligence/Machine Learning (AI/ML), signal modeling and simulation used for radio frequency (RF) ranges and test and evaluation centers using our TReX platform, and integrated RF and cyber solutions to deliver effects from long standoff distances. ▪ We conduct vulnerability research and resiliency solutions for existing weapon systems, critical infrastructure and space systems, while supporting the development and integration of next generation electronic warfare capabilities.
Cyber Command, and DOD research laboratories. ▪ Our tools and products are used across a wide variety of electronic warfare operations, including commercial cellular survey, automated signal identification and characterization using Artificial Intelligence/Machine Learning (AI/ML), signal modeling and simulation used for radio frequency (RF) ranges and test and evaluation centers using our Threat Representative Environment (TReX) platform, and integrated RF and cyber solutions to deliver effects from long standoff distances. ▪ We conduct vulnerability research and provide resiliency solutions for existing weapon systems, critical infrastructure, and space systems, while supporting the development and integration of next generation electronic warfare capabilities.
In addition, we are the program manager for the California Delta Water Conveyance Modernization Project, a multi-billion environmentally compliant water transfer project to improve water supply sustainability and reliability for human and environmental uses. • INF- NA - Our INF-NA business unit also includes intelligent transportation systems, utilities, environmental remediation, emerging contaminants, aviation, rail and transit, and ParsonsX, our enterprise digital transformation organization.
In addition, we are the program manager for the California Delta Water Conveyance Modernization Project, a multi-billion environmentally compliant water transfer project to improve water supply sustainability and reliability for human and environmental uses. • INF- NA - Our INF-NA business unit also includes intelligent transportation systems, utilities, environmental remediation, emerging contaminants (including PFAS/PFOS), aviation, rail and transit, and ParsonsX, our enterprise digital transformation organization.
Susan Balaguer, age 54, was appointed as Chief Human Resources Officer of Parsons Corporation effective July 16, 2021. Ms. Balaguer is responsible for all aspects of the human resources function, including benefits, recruitment, retention, and the employee lifecycle and employee experience for the company. Ms.
Susan Balaguer, age 55, was appointed as Chief Human Resources Officer of Parsons Corporation effective July 16, 2021. Ms. Balaguer is responsible for all aspects of the human resources function, including benefits, recruitment, retention, and the employee lifecycle and employee experience for the company. Ms.
Our capabilities in environmental remediation, water and wastewater treatment systems, and urban development allow us to deliver value to our customers by employing advanced technologies, improving timelines and reducing costs while reducing environmental impacts and improving the quality of life.
Our capabilities in environmental remediation, water and wastewater treatment systems, and urban development allow us to deliver value to our customers by employing advanced technologies, improving timelines and decreasing costs while reducing environmental impacts and improving the quality 1 of life.
Item 1. Bu siness. Overview Parsons is a leading provider of the solutions and services required to support the complex security environment, unprecedented global infrastructure demand and a world of digital transformation effecting our customers.
Item 1. Bu siness. Overview Parsons is a leading provider of the solutions and services required to support the complex security environment, unprecedented global infrastructure demand, and a world of digital transformation impacting our customers.
Our capabilities include technologies in long-span bridges, tunnels, building Information modeling, and water/wastewater treatment and conveyance. • Examples of our design capabilities are our role as the lead designer of the Tacoma Narrows Bridge, the largest twin tower suspension bridge in the world when it opened, lead designer for the Goethals bridge connecting Staten Island, NY and Elizabeth, NJ, and lead designer for the Federal Way rail extension for Sound Transit in Seattle. • For program management, we are the Owner’s Engineer for the Gordie Howe International Bridge between Windsor, Ontario and Detroit, Michigan, which will have the longest main span of any cable-stayed bridge in North America.
Our capabilities include technologies in long-span bridges, tunnels, building Information modeling, and water/wastewater treatment and conveyance. • Examples of our design capabilities are our role as the lead designer of the Tacoma Narrows Bridge, the largest twin tower suspension bridge in the world when it opened, lead designer for the new Goethals Bridge connecting Staten Island, NY and Elizabeth, NJ, and lead designer for the Federal Way rail extension for Sound Transit in Seattle. • For program management, we are the Owner’s Engineer for the Gordie Howe International Bridge between Windsor, Ontario and Detroit, Michigan, which will have the longest main span of any cable-stayed bridge in North America and Gateway, the new Hudson River Tunnel.
This reemergence has resulted in increased global disorder and a security environment, defined by rapid technological change, which may be more complex than ever before. We believe the U.S. Department of Defense and Intelligence Community will continue to invest in cyber, space, intelligence, missile defense, and critical infrastructure protection.
This reemergence has resulted in increased global disorder and a security environment, defined by rapid technological change, which may be more complex than ever before. We believe the U.S. Department of Defense and Intelligence Community will continue to invest in cyber, space, artificial intelligence, electronic warfare, missile defense, and critical infrastructure protection.
They have diverse leadership capabilities in the markets we serve and the solutions and technology we deliver. Most importantly, we strive to give our employees and managers the best possible employee experience throughout their careers with Parsons.
They have strong leadership capabilities in the markets we serve and the solutions and technology we deliver. Most importantly, we strive to give our employees and managers the best possible employee experience throughout their careers with Parsons.
In addition, as a result of supporting ongoing war efforts, ammunition and munitions need to be replenished and the Army ammunition plants must be modernized to support this need. Cybersecurity is Mission Critical to U.S.
In addition, as a result of supporting ongoing war efforts, ammunition and munitions need to be replenished and the Army ammunition plants must be modernized to support this need. Cyber is Mission Critical to U.S.
Since the first deployment in 2007, iNET® has been delivered to twenty-four state Departments of Transportation, twenty-two cities, eight county agencies, seven toll agencies, and seven different countries. 5 • For aviation, we play a critical role as program manager and lead designer for global airports.
Since the first deployment in 2007, iNET® has been delivered to twenty-five state Departments of Transportation, twenty-four cities, eight county agencies, eight toll agencies, and seven different countries. • For aviation, we play a critical role as program manager and lead designer for global airports.
We are committed to attracting, retaining, and developing a diverse and inclusive workforce by having a: • Culture of employee engagement at all organizational levels • Work environment that promotes training, mentoring, and career development planning • Differentiated benefits program, including flexible work hours, remote work options, and an employee stock ownership plan • Dual technical career path that leads to positions as Chief Technology Officer and/or Technical Fellow • Diversity, Equity and Inclusion (DEI) program • “Parsons Gives Back” program to support our communities and promote volunteering • Global hiring strategy outside of high-employment zones • Robust university relations and intern program to help shape the next generation of leaders and promote diversity • Internal mobility program that supports employee growth, career development and retention “Get to Yes” By “getting to yes”, we enable the delivery of agile, innovative, and transformative solutions to our customers.
We are committed to attracting, retaining, and developing an experienced workforce by having a: • Culture of employee engagement at all organizational levels • Work environment that promotes training, mentoring, and career development planning • Differentiated benefits program, including flexible work hours, remote work options, and an employee stock ownership plan • Dual technical career path that leads to positions as Chief Technology Officer and/or Technical Fellow • “Parsons Gives Back” program to support our communities and promote volunteering • Global hiring strategy outside of high-employment zones • Robust university relations and intern program to help shape the next generation of leaders • Internal mobility program that supports employee growth, career development and retention “Get to Yes” By “getting to yes”, we enable the delivery of agile, innovative, and transformative solutions to our customers.
Within our Advisory Services group, Parsons is providing clients with relevant asset information across the full range of asset types to enable management decisions and maximize ROI.
Within our Advisory Services group, Parsons is providing clients with relevant asset information across the full range of asset types to enable data driven management decisions and maximize ROI.
We are the program manager of the environmentally sensitive Diamond Head Extension Program at Honolulu International Airport, the Houston Airport System, and the Landside Access Modernization Program for Los Angeles International Airport; and the lead designer on the Newark Airport Terminal A replacement project known as Terminal 1. • Our rail and transit capabilities include systems optimization, communications-based train control, rail system design and system assurance.
We are the program manager of the environmentally sensitive Diamond Head Extension Program at Honolulu International Airport, the Houston Airport System, and 5 the Landside Access Modernization Program for Los Angeles International Airport; and were lead designer on the award-winning Newark Airport Terminal A replacement project known as Terminal 1. • Our rail and transit capabilities include systems optimization, communications-based train control, rail system design and system assurance.
Support our customer’s integrated air and missile defense strategy and deployment. Provide thought leadership in evolving areas, including hypersonic defense. o Critical Infrastructure Protection – Provide critical infrastructure protection in sectors where we have installed base, including facilities, health care, transportation, water and energy.
Support our customer’s integrated air and missile defense strategy and deployment. Provide thought leadership in evolving areas, including counter hypersonics. o Critical Infrastructure Protection – Provide critical infrastructure protection in sectors where we have installed base, including facilities, health care, transportation, water and energy.
We expect to recognize $3.8 billion of our funded backlog as of December 31, 2023 as revenues in the following twelve months. However, our 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.
We expect to recognize $3.9 billion of our funded backlog as of December 31, 2024 as revenues in the following twelve months. However, our 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.
All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract. As of December 31, 2023, our total backlog was approximately $8.6 billion, consisting of $5.0 billion of funded backlog and $3.6 billion of unfunded backlog.
All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract. As of December 31, 2024, our total backlog was approximately $8.9 billion, consisting of $5.9 billion of funded backlog and $3.0 billion of unfunded backlog.
The Corporate Governance and Responsibility Committee of our Board of Directors provides oversight of environmental, social and governance (ESG), including climate-related topics, and the Audit and Risk Committee provides oversight of our enterprise risk management program, including climate-related risks. Our Chief Executive Officer holds overall executive-level responsibility for ESG.
The Corporate Governance and Responsibility Committee of our Board of Directors provides oversight of environmental, social and governance, including climate-related topics, and the Audit and Risk Committee provides oversight of our enterprise risk management program, including climate-related risks. Our Chief Executive Officer holds overall executive-level responsibility for these matters.
We, managed successful delivery of the newly opened Abu Dhabi International Airport tripling the size of the previous terminals, led the Dubai Strategic Sewage Network program to increase capacity and sustainability, managed Lusail City Development the largest ever city development in Qatar, and provided program management of Riyadh’s King Abdullah Financial District prime business, hospitality and lifestyle destination. • We are members of various collaborative delivery models, including Delivery Partner on the Qiddiya destination city development on the outskirts of Riyadh, and as an Integrated Project Management team member on NEOM The Line sustainable city in Saudi Arabia. • Parsons is considered a go-to service provider for successful and timely delivery of world events with fixed opening dates, including UAE’s World Expo 2020 for which Parsons provided site-wide infrastructure and landscape design, as well as construction supervision services; and for FIFA World Cup 2022, where services from transportation management planning to vehicle access strategies were provided to manage traffic and build resilient infrastructure for the mega sporting event. • The team maintains a keen focus on innovative practices.
We, managed successful delivery of the award-winning Abu Dhabi International Airport tripling the size of the previous terminals, led the Dubai Strategic Sewage Network program to increase capacity and sustainability, managed Lusail City Development the largest ever city development in Qatar, and provided program management of Riyadh’s King Abdullah Financial District prime business, hospitality and lifestyle destination. • We are members of various collaborative delivery models, including Delivery Partner on the Qiddiya destination city development near Riyadh and a team member on NEOM The Line sustainable city in Saudi Arabia • Parsons is considered a go-to service provider for successful and timely delivery of world events with fixed opening dates, including UAE’s World Expo 2020 for which Parsons provided site-wide infrastructure, landscape design, and construction supervision services; and for FIFA World Cup 2022, where services from transportation management planning to vehicle access strategies and design were provided to manage traffic and build resilient infrastructure for the mega sporting event. • The team maintains a keen focus on innovative practices.
The company also provides autonomous and distributed detection, identification, exploitation and the defeat of today’s most complex communications. • Braxton Science and Technology Group, LLC: Acquired in November 2020 at a purchase price of $310.9 million ($267 million less the tax asset), Braxton operates at the forefront of satellite operations, ground automation, flight dynamics, and spacecraft antenna simulation for the U.S. 11 Department of Defense and Intelligence Community.
The company also provides autonomous and distributed detection, identification, exploitation and the defeat of today’s most complex communications. • Braxton Science and Technology Group, LLC: Acquired in November 2020 at a purchase price of $310.9 million ($267 million less the tax asset), Braxton operates at the forefront of satellite operations, ground automation, flight dynamics, and spacecraft antenna simulation for the U.S.
Whether a first-of-a-kind sustainable, industrial city that runs on 100% renewable energy, security-as-a-service platform that uses advanced analytics and artificial intelligence/machine learning to defend against utility and water cyber threats, or elimination of emerging contaminants from the environment, we deliver integrated solutions that our customers need and the world demands.
Whether a first-of-a-kind sustainable, industrial city that runs on 100% renewable energy, security-as-a-service platform that uses advanced analytics and artificial intelligence/machine learning to defend against critical infrastructure cyber threats (transportation, utility, water, facility and healthcare), or elimination of emerging contaminants from the environment, we deliver integrated solutions that our customers need and the world demands.
We are expanding our portfolio in key emerging growth areas, including intelligent transportation systems, smart mobility, environmental remediation, and water/wastewater treatment. • INF – NA - Our INF – NA business unit provides planning, engineering and management services for complex infrastructure, including bridges and tunnels, roads and highways and water and wastewater.
We are expanding our portfolio in key emerging growth areas, including intelligent transportation systems, smart mobility, environmental remediation, events management, urban development and rebuild, and water/wastewater treatment. • INF – NA - Our INF – NA business unit provides planning, engineering and management services for complex infrastructure, including bridges and tunnels, roads and highways, and water and wastewater.
Parsons’ wide-ranging capabilities enable us to provide our services, products and solutions across the national security and critical infrastructure markets, and we are well positioned to benefit from the trends in these markets.
Parsons’ extensive capabilities enable us to provide our services, products, and solutions across the national security and critical infrastructure markets, and we are well positioned to benefit from the trends in these markets.
This acquisition expands Parsons’ presence in two rapidly growing end markets: grid modernization and cyber resiliency for critical infrastructure. • Xator Corporation: Acquired on June 1, 2022 at a purchase price of $387.5 million. Xator expands Parsons’ presence within the U.S.
This acquisition expands Parsons’ presence in two rapidly growing end markets: grid modernization and cyber resiliency for critical infrastructure. • Xator Corporation: Acquired on May 31, 2022 at a purchase price of $387.5 million. Xator expands Parsons’ presence within the U.S.
We provide critical technologies, including cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and biosurveillance. The U.S. government and its agencies represent substantially all of the revenue of our Federal Solutions segment.
We provide critical technologies, including cyber; missile defense; intelligence; electronic warfare; space ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and biosurveillance. The U.S. government and its agencies represent substantially all of the revenue of our Federal Solutions segment.
Within our diverse base, our customer relationships include states (e.g., Texas, Florida, California, Colorado, Washington, Illinois, New York, New Jersey and Georgia), cities, and Canadian provinces and territories (e.g., Ontario, British Columbia, Quebec, Nova Scotia and Alberta), as well as water and wastewater authorities.
Our customer relationships include states (e.g., Texas, Florida, California, Colorado, Washington, Illinois, New York, New Jersey and Georgia), cities, and Canadian provinces and territories (e.g., Ontario, British Columbia, Quebec, Nova Scotia, and Alberta), as well as transportation, water and wastewater authorities.
As an example, we are integrating cutting-edge construction supervision technologies across over 30 major GCC projects, enhancing efficiency and capabilities and driving much needed innovation in the construction industry. 6 • Our Smart Solutions Lab provides digital solutions to our clients as an important and integral aspect of our technical offerings.
As an example, we are integrating cutting-edge AI-driven design and construction supervision technologies across over 50 major GCC projects, enhancing efficiency and capabilities and driving much needed innovation in the construction industry. 6 • Our Smart Solutions Lab provides digital solutions to our clients as an important and integral aspect of our technical offerings.
Our team of engineers, scientists, programmers and other specialists include PhDs and certified hackers, and a large number of our skilled workforce hold government security clearances, which provides a competitive advantage for the highly technical and demanding work we perform. Our dual technical career path and Technical Fellows program enable retention and development of our strong technical talent.
Our team of engineers, scientists, programmers and other specialists include PhDs and certified hackers, and over 4,000 of our skilled workforce hold government security clearances, which provides a competitive advantage for the highly technical and demanding work we perform. Our dual technical career path and Technical Fellows program enable retention and development of our strong technical talent.
Department of Defense and Intelligence Community customers. o Space and Mission Defense – Extend our space situational awareness, small satellite integration and payload, command and control and enterprise ground systems and assured position, navigation and timing solutions to our current space customers and to new space and geospatial customers in the government and commercial space markets.
Department of Defense and Intelligence Community customers. o Space and Mission Defense – Extend our space situational awareness, command and control and enterprise ground systems and assured position, navigation and timing solutions to our current space customers and to new space, and geospatial customers in the government and commercial space markets.
With a culture driven by agility, innovation and collaboration, we deliver operationally proven capabilities in emerging technical areas, including advanced analytics, artificial intelligence/machine learning, cybersecurity, electronic warfare, environmental remediation and space systems.
With a culture driven by agility, innovation and collaboration, we provide operationally proven capabilities in emerging technical areas, including advanced analytics, artificial intelligence/machine learning, cyber, electronic warfare, environmental remediation and space systems.
We are also pleased that our employee engagement score was 78 against a benchmark of 75. 16 At the highest level, our results describe an organization with a strong performance-driven and team-based culture. Employee Recognition As a people first organization, we are dedicated to recognizing employee performance and promoting a culture of recognition.
We are also pleased that our employee engagement score was 80 against a benchmark of 75, up from 78 in 2023. At the highest level, our results describe an organization with a strong performance-driven and team-based culture. Employee Recognition As a people first organization, we are dedicated to recognizing employee performance and promoting a culture of recognition.
In addition, we maintain a number of trade secrets that we endeavor to protect to ensure their continuing availability to us. Our technical expertise is vital to our growth strategy, and we believe they are a core competitive advantage. We have 33 registered patents and 14 pending patents in the United States and 6 pending patents internationally.
In addition, we maintain a number of trade secrets that we endeavor to protect to ensure their continuing availability to us. Our technical expertise is vital to our growth strategy, and we believe they are a core competitive advantage. We have 40 registered patents and 19 pending patents in the United States and 5 pending patents internationally.
With over 233 sustainability accreditations, we deliver resilient infrastructure, green building and renewable energy programs and projects that utilize best industry practices, as well as utilize leading edge technology and tools to provide environmental remediation. We work with customers to achieve and obtain the highest possible ratings such as the LEED, Envision, Estidama, and others.
With over 233 sustainability accreditations, we deliver resilient infrastructure, and sustainable projects that utilize best industry practices, as well as utilize leading edge technology and tools to provide environmental remediation. We work with customers to achieve and obtain the highest possible ratings such as the LEED, Envision, Estidama, and others.
Department of Defense announced the development of Cybersecurity Maturity Model Certification (“CMMC”) as a framework to assess and enhance the cybersecurity posture of the Defense Industrial Base (“DIB”), particularly as it relates to controlled unclassified information within the supply chain. CMMC is designed to ensure that contractors providing services to the U.S.
Department of Defense (DOD) released the Cybersecurity Maturity Model Certification (“CMMC”) program as a framework to assess and enhance the cybersecurity posture of the Defense Industrial Base (“DIB”), particularly as it relates to controlled unclassified information (CUI) within the supply chain. CMMC is designed to ensure that contractors providing services to the U.S.
We believe that the cybersecurity market will continue to grow in response to the nation state threat landscape and the vulnerabilities inherent in critical infrastructure. Our unique portfolio of Federal Solutions and Critical Infrastructure provides the technical capabilities to detect and prevent cyberattacks along with the domain knowledge to understand how infrastructure operates.
We believe that the cyber market will continue to grow in response to the nation state threat landscape and the vulnerabilities inherent in critical infrastructure. Our unique portfolio of Federal Solutions and Critical Infrastructure provides the technical capabilities to detect and prevent cyberattacks along with the domain knowledge to understand how to secure infrastructure from threats.
Texas is poised to receive nearly $30 billion in total transportation funding from the Infrastructure Investment and Jobs Act between 2022 and 2026. • Sealing Technologies, Inc.: Acquired on August 22, 2023 for a purchase price of $179.3 million.
Texas is poised to receive nearly $30 billion in total transportation funding from the Infrastructure Investment and Jobs Act between 2022 and 2026. • Sealing Technologies, Inc.: Acquired on August 23, 2023 for a purchase price of $176.0 million.
Driven by our integrated people, processes and technology approach, we have a reputation for innovation and delivering mission outcomes for our customers’ most important endeavors. 8 Our differentiated business model has driven high win rates with strong book-to-bill, leading organic revenue growth, expanded bottom line performance, and low capital requirements.
Driven by our integrated people, processes and technology approach, we have a reputation for innovation and delivering mission outcomes for our customers’ most important endeavors. 8 Our differentiated business model and ability to move up the value chain and win larger programs, has driven high win rates with strong book-to-bill, leading organic revenue growth, expanded bottom line performance, and low capital requirements.
As of December 31, 2023, our backlog was $8.6 billion, an increase of 5% from year end fiscal 2022. Long-Term Customer Relationships We maintain long-term relationships with key government and commercial customers, many of which span over 40 years.
As of December 31, 2024, our backlog was $8.9 billion, an increase of 4% from year end fiscal 2023. Long-Term Customer Relationships We maintain long-term relationships with key government and commercial customers, many of which span over 40 years.
Smith, age 60, was appointed Chair of the Board of Directors on January 18, 2022, effective April 14, 2022. She became the President and Chief Executive Officer on July 1, 2021 and was appointed to the board of directors in December 2020.
Smith, age 61, was appointed Chair of the Board of Directors on January 18, 2022. She became the President and Chief Executive Officer on July 1, 2021 and was appointed to the board of directors in December 2020.
We serve a diverse global customer base including federal, state, municipal and industry customers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles, San Francisco, New York, and Paris, the state of New Jersey, AMTRAK, CSX, Metrolinx (Ontario, Canada), Southern Nevada Water Authority, Riyadh Metro, Dubai Roads and Transportation Authority (Dubai RTA), Abu Dhabi Department of Municipalities and Transport, Qatar Public Works Authority (Qatar PWA), the Saudi Arabia Public Investment Fund and international developers.
We serve a wide-ranging global customer base including federal, state, municipal and industry customers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles, San Francisco, New York, and Paris, the state of New Jersey, Amtrak, CSX, Metrolinx (Ontario, Canada), Southern Nevada Water Authority, the Royal Commission for Riyadh City, Dubai Roads and Transportation Authority, Abu Dhabi Department of Municipalities and Transport, Qatar Public Works Authority, Saudi Arabia’s Public Investment Fund, and international developers.
We are part of the consortium Riyadh Metro Transit Consultants responsible for program management of the Riyadh Metro – the largest metro system under development in the world.
We are part of the consortium Riyadh Metro Transit Consultants responsible for program management of the Riyadh Metro – the largest metro system under development in the world which successfully opened in 2024.
Generally, our government clients can also terminate, renegotiate, or modify any of their contracts with us at their convenience, and many of our government contracts are subject to renewal or extension annually. In 2019, the U.S.
Generally, our government clients can also terminate, renegotiate, or modify any of their contracts with us at their convenience, and many of our government contracts are subject to renewal or extension annually. On January 31, 2020, the U.S.
It is a collaborative network of over fifty selected motivated and passionate subject matter experts working to solve technical challenges through either strategic research and development or through the development of long-term technical policies and best practices. The program defines its success through engagement, mentorship, and retention.
It is a collaborative network of over fifty selected motivated and passionate subject matter experts working to solve technical challenges through either strategic research and development or through the development of long-term technical policies and best practices.
Across those programs, we have developed longstanding relationships with a diverse global customer set that includes intelligence agencies, the U.S. military, state and local governments, and international clients; all of whom know Parsons as a trusted partner sought out for our commitment to their success.
Across those programs, we have developed longstanding relationships with a wide-ranging global customer set that includes U.S. federal government departments and agencies, the U.S. military, state and local governments, and international clients; all know Parsons as a trusted partner sought out for our commitment to their success.
We achieved an overall win rate of 66% in fiscal 2023, 49% in the year ended December 31, 2022 (“fiscal 2022”) and 56% in the year ended December 31, 2021 (‘fiscal 2021”), which includes strong re-compete win rates of 93% in fiscal 2023 giving us long-term certainty on key contracts.
We achieved an overall win rate of 72% in fiscal 2024, 66% in the year ended December 31, 2023 (“fiscal 2023”) and 49% in the year ended December 31, 2022 (‘fiscal 2022”), which includes strong re-compete win rates of 84% in fiscal 2024 giving us long-term certainty on key contracts.
As of December 31, 2023, our total backlog was $8.6 billion, an increase of 5.0% from December 31, 2022 . Federal Solutions Our Federal Solutions business provides integrated solutions, software and hardware products and engineering services. Federal Solutions consists of two business units: Defense & Intelligence (D&I) and Engineered Systems (ES).
As of December 31, 2024, our total backlog was $8.9 billion, an increase of 4% from December 31, 2023 . Federal Solutions Our Federal Solutions business provides integrated solutions, software and hardware products, and engineering design services. Federal Solutions consists of two business units: Defense & Intelligence (D&I) and Engineered Systems (ES).
Cities around the globe increasingly demand connected and more sustainable capabilities, such as sensor networks and communication strategies to connect streetlights, security cameras' and emergency systems, to provide important real-time information and better serve their citizens and reduce carbon emissions.
Urbanization Creates Demand for Smart Cities with Connected Populations . Cities around the globe increasingly demand connected and more sustainable capabilities, such as sensor networks and communication strategies to connect streetlights, security cameras, and emergency systems, to provide important real-time information and better serve their citizens and reduce carbon emissions.
We also aim to be the employer of choice for top talent in every market that we serve by fostering a positive culture for employee engagement; focusing on diversity, equity, and inclusion; emphasizing health and wellbeing for all employees; and encouraging career development at all levels of the organization.
World Class Talent We aim to be the employer of choice for top talent in every market that we serve by fostering a positive culture for employee engagement; emphasizing health and wellbeing for all employees; and encouraging career development at all levels of the organization.
Our most important asset is our diverse team of talented employees, over 18,500 as of December 31, 2023, who are committed and passionate experts critical to delivering leading capabilities 12 and whose expertise is sought by our clients for their most sophisticated applications and challenges.
Our most important asset is our team of talented employees, over 19,600 as of December 31, 2024, who are committed and passionate experts critical to delivering leading capabilities and whose expertise is sought by our clients for their most sophisticated applications and challenges.
That flexibility is what we are most proud of—all employees can recognize someone else or be recognized themself. In 2023, we are pleased that over 3,200 DRIVE awards were conveyed to our employees with monetary awards totaling over $5.8 million.
That flexibility is what we are most proud of—all employees can recognize someone else or be recognized themself. In 2024, we are pleased that over 4,500 DRIVE awards were conveyed to our employees with monetary awards totaling over $7.5 million.
Advances in technology and a continued focus on sustainability are dramatically shifting the operating landscape across our markets, with pressing challenges ranging from confronting increasingly sophisticated cybersecurity threats to upgrading aging infrastructure to reducing environmental footprint and impact. Our customers are seeking smart technology-enabled solutions leveraging artificial intelligence to enhance and transform their systems performance and to address these challenges.
Advances in technology and geopolitical events are dramatically shifting the operating landscape across our markets, with pressing challenges ranging from confronting increasingly sophisticated cybersecurity threats to upgrading aging infrastructure to reducing environmental footprint and improving water quality. Our customers are seeking smart technology-enabled solutions leveraging artificial intelligence to enhance and transform their systems performance and to address these challenges.
Our ground support equipment is enabling efficient and effective access to space for small satellites on commercial, national security and small class launch systems. ▪ Representative products include our Command-and-Control Core (C2Core®) mission planning and tasking suite that links requests, effects and operational guidance in a unified database, and ZEUS® Recovery of Airbase Denied by Ordnance (RADBO) laser neutralization system offering critical force protection in any operational theater. ▪ We are the prime Technical, Engineering, Advisory and Management Support (TEAMS) Next contractor for the MDA, where we provide engineering, analysis, and management support for the development of integrated and layered missile defense systems that defend U.S. and allied forces against ballistic, hypersonic, and cruise missile threats, and 3 advance the agency’s integrated air and missile defense, command and control, and battle management and communications missions across all-domain battlespace. ▪ Cyber and National Operations – We provide capabilities across the digital landscape, including full-spectrum cyber, information operations, and analytics.
Importantly, we offer this innovative ground spacecraft operations center on a commercial as-a-service business model. ▪ Representative products include our Command-and-Control Core (C2Core®) mission planning and tasking suite that links requests, effects and operational guidance in a unified database, and ZEUS® Recovery of Airbase Denied by Ordnance (RADBO) laser neutralization system offering critical force protection in any operational theater. ▪ We are the prime Technical, Engineering, Advisory and Management Support (TEAMS) Next contractor for the MDA, where we provide engineering, analysis, and management support for the development of integrated and layered missile defense systems that defend U.S. and allied forces against ballistic, hypersonic, and cruise missile threats, and advance the agency’s integrated air and missile defense, command and control, and battle management and communications missions across all-domain battlespace. 3 ▪ Cyber and National Operations – We provide capabilities across the digital landscape, including full-spectrum cyber, defensive cyber operations, information operations, and analytics.
Deliver holistic solutions including electronic security systems, cybersecurity, counter unmanned air systems and biometrics. o Transportation – Capitalize on the increased IIJA funding and increased global transportation and infrastructure spending to further our roads and highways, bridges, rail and transit, and aviation business. Capitalize on broadband and environmental spend in areas where Parsons is differentiated.
Deliver holistic solutions including electronic security systems, cybersecurity, counter unmanned air systems and biometrics. o Transportation – Capitalize on the increased IIJA funding and increased global transportation and infrastructure spending to further our roads and highways, bridges, rail and transit, and aviation business.

… 83 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+11 added−14 removed222 unchanged
Biggest changeCRs generally continue the level of funding from the prior year’s appropriations or the previously approved CR from the current year; • U.S. government agencies awarding contracts on a technically acceptable/lowest cost basis in order to reduce expenditures; • delays in the payment of our invoices by government payment offices; • results of elections, including politicians who may have priorities that would reduce spending in areas in which we operate; • an inability by the U.S. government to fund its operations as a result of a failure to increase the federal government’s debt ceiling, a credit downgrade of U.S. government obligations or for any other reason; and • changes in the political climate and general economic conditions, including a slowdown of the economy or unstable economic conditions and responses to conditions, such as emergency spending, that reduce funds available for other government priorities. 25 Any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, terrorism, war, natural disasters, destruction of government facilities, and other potential calamities could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to client locations or facilities as a result of such disruptions.
Biggest changeCRs generally continue the level of funding from the prior year’s appropriations or the previously approved CR from the current year; • U.S. government agencies awarding contracts on a technically acceptable/lowest cost basis in order to reduce expenditures; • delays in the payment of our invoices by government payment offices; 25 • results of elections, including politicians who may have priorities that would reduce spending in areas in which we operate; • an inability by the U.S. government to fund its operations as a result of a failure to increase the federal government’s debt ceiling, a credit downgrade of U.S. government obligations or for any other reason; and • changes in the political climate and general economic conditions, including a slowdown of the economy or unstable economic conditions and responses to conditions, such as emergency spending, that reduce funds available for other government priorities.
These rights and remedies allow government clients, among other things, to: • terminate existing contracts, with short notice, for convenience as well as for default; • reduce orders under or otherwise modify contracts; • for contracts subject to the Truthful Cost and Pricing statute, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate and current; • for some contracts, (1) demand a refund, make a forward price adjustment or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (2) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated; • terminate our facility security clearances and thereby prevent us from receiving classified contracts and complete work on existing contracts; • cancel multi-year contracts and related task orders if funds for contract performance for any subsequent year become unavailable; • decline to exercise an option to renew a multi-year contract or issue task orders in connection with indefinite delivery/indefinite quantity contracts, or IDIQ contracts; 28 • claim rights in solutions, systems and technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position; • prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment; • subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction or modification of the awarded contract; • suspend or debar us from doing business with the applicable government; and • control or prohibit the export of our services.
These rights and remedies allow government clients, among other things, to: • terminate existing contracts, with short notice, for convenience as well as for default; • reduce orders under or otherwise modify contracts; 28 • for contracts subject to the Truthful Cost and Pricing statute, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate and current; • for some contracts, (1) demand a refund, make a forward price adjustment or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (2) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated; • terminate our facility security clearances and thereby prevent us from receiving classified contracts and complete work on existing contracts; • cancel multi-year contracts and related task orders if funds for contract performance for any subsequent year become unavailable; • decline to exercise an option to renew a multi-year contract or issue task orders in connection with indefinite delivery/indefinite quantity contracts, or IDIQ contracts; • claim rights in solutions, systems and technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position; • prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment; • subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction or modification of the awarded contract; • suspend or debar us from doing business with the applicable government; and • control or prohibit the export of our services.
Our anti-takeover provisions: • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • provide that our board of directors is classified into three classes with staggered, three-year terms and that directors may only be removed for cause; • include blank-check preferred stock, the preference, rights and other terms of which may be set by the board of directors and could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise benefit our stockholders; • eliminate the ability of our stockholders to call special meetings of stockholders; • specify that special meetings of our stockholders can be called only by our board of directors, or a board committee authorized with the power to call such meetings; • prohibit stockholder action by written consent, which has the effect of requiring all stockholder actions to be taken at a meeting of our stockholders; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • prohibit cumulative voting in the election of directors; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholders’ meetings.
Our anti-takeover provisions: • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • provide that our board of directors is classified into three classes with staggered, three-year terms and that directors may only be removed for cause; 49 • include blank-check preferred stock, the preference, rights and other terms of which may be set by the board of directors and could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise benefit our stockholders; • eliminate the ability of our stockholders to call special meetings of stockholders; • specify that special meetings of our stockholders can be called only by our board of directors, or a board committee authorized with the power to call such meetings; • prohibit stockholder action by written consent, which has the effect of requiring all stockholder actions to be taken at a meeting of our stockholders; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • prohibit cumulative voting in the election of directors; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholders’ meetings.
The degree to which we are able to utilize our employees in a timely manner or at all is affected by a number of factors, including: • our ability to transition employees from completed projects to new assignments and to hire, assimilate and deploy new employees; • our ability to forecast demand for our services and to maintain and deploy headcount that is aligned with demand, including employees with the right mix of skills and experience to support our projects; • our employees’ ability to obtain or retain necessary security clearances or required certifications; 29 • changes to or delays or cancellations of projects, as a result of governmental budgetary processes or otherwise; • our ability to manage attrition; • the impact of inflation upon the cost of services and materials provided to customers; and • our need to devote time and resources to training, business development, and other non-chargeable activities.
The degree to which we are able to utilize our employees in a timely manner or at all is affected by a number of factors, including: • our ability to transition employees from completed projects to new assignments and to hire, assimilate and deploy new employees; • our ability to forecast demand for our services and to maintain and deploy headcount that is aligned with demand, including employees with the right mix of skills and experience to support our projects; • our employees’ ability to obtain or retain necessary security clearances or required certifications; • changes to or delays or cancellations of projects, as a result of governmental budgetary processes or otherwise; • our ability to manage attrition; • the impact of inflation upon the cost of services and materials provided to customers; and • our need to devote time and resources to training, business development, and other non-chargeable activities.
Risk Related to Our Common Stock • Your ability to influence corporate matters may be limited because the ESOP beneficially owns a majority of our stock and therefore our employees, voting the shares allocated to them under 24 the ESOP, or the ESOP Trustee, who will have the right to vote shares for which no voting instructions are provided by employees, could have substantial control over us. • We are a “controlled company” within the meaning of the New York Stock Exchange listing standards and, as a result, qualify for exemptions from certain corporate governance requirements.
Risk Related to Our Common Stock • Your ability to influence corporate matters may be limited because the ESOP beneficially owns a majority of our stock and therefore our employees, voting the shares allocated to them under the ESOP, or the ESOP Trustee, who will have the right to vote shares for which no voting instructions are provided by employees, could have substantial control over us. • We are a “controlled company” within the meaning of the New York Stock Exchange listing standards and, as a result, qualify for exemptions from certain corporate governance requirements.
Our operating results and the trading price of our shares may fluctuate in response to various factors, including: • market conditions in the broader stock market; 45 • actual or anticipated fluctuations in our quarterly financial and operating results; • introduction of new products or services by us or our competitors; • changes in our awards, backlog and book-to-bill ratios in a given period; • issuance of new or changed securities analysts’ reports or recommendations; • results of operations that vary from expectations of securities analysis and investors; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • strategic actions by us or our competitors; • announcement by us, our competitors or our acquisition targets; • sales, or anticipated sales, of large blocks of our stock; • additions or departures of key personnel; • regulatory, legal or political developments; • public response to press releases or other public announcements by us or third parties, including our filings with the SEC; • litigation and governmental investigations; • seasonality associated with U.S. federal, state, regional and local government funding and spending; • changing economic conditions; • changes in accounting principles; • default under agreements governing our indebtedness; • exchange rate fluctuations; and • other events or factors, including those from natural disasters, war, actors of terrorism or responses to these events and pandemics, such as the COVID-19 pandemic.
Our operating results and the trading price of our shares may fluctuate in response to various factors, including: • market conditions in the broader stock market; • actual or anticipated fluctuations in our quarterly financial and operating results; • introduction of new products or services by us or our competitors; • changes in our awards, backlog and book-to-bill ratios in a given period; • issuance of new or changed securities analysts’ reports or recommendations; • results of operations that vary from expectations of securities analysis and investors; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • strategic actions by us or our competitors; • announcement by us, our competitors or our acquisition targets; • sales, or anticipated sales, of large blocks of our stock; • additions or departures of key personnel; • regulatory, legal or political developments; 46 • public response to press releases or other public announcements by us or third parties, including our filings with the SEC; • litigation and governmental investigations; • seasonality associated with U.S. federal, state, regional and local government funding and spending; • changing economic conditions; • changes in accounting principles; • default under agreements governing our indebtedness; • exchange rate fluctuations; and • other events or factors, including those from natural disasters, war, actors of terrorism or responses to these events and pandemics, such as the COVID-19 pandemic.
We are party to a registration rights agreement with the ESOP Trustee, providing the ESOP with certain demand registration rights related to shares held by the ESOP in the event the ESOP Trustee determines in good faith, in exercising its fiduciary duties under ERISA, that the ESOP is required to sell its shares, which we believe is only likely 46 to occur if our business, financial condition or results of operations have materially and adversely deteriorated.
We are party to a registration rights agreement with the ESOP Trustee, providing the ESOP with certain demand registration rights related to shares held by the ESOP in the event the ESOP Trustee determines in good faith, in exercising its fiduciary duties under ERISA, that the ESOP is required to sell its shares, which we believe is only likely to occur if our business, financial condition or results of operations have materially and adversely deteriorated.
We may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations, regardless of whether such contamination resulted from the conduct of others or from the consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.
We may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that 39 received waste generated by our operations, regardless of whether such contamination resulted from the conduct of others or from the consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.
These divestitures similarly require significant investment of time and resources and may disrupt our business, distract management from other responsibilities and 32 may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which could adversely affect our business, financial condition or results of operations.
These divestitures similarly require significant investment of time and resources and may disrupt our business, distract management from other responsibilities and may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which could adversely affect our business, financial condition or results of operations.
In addition, even if our operations are integrated successfully, we may not realize the full benefits of the acquisitions, including the synergies, operating efficiencies, or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. We depend on our teaming arrangements and relationships with other contractors and subcontractors.
In addition, even if our operations are integrated successfully, we may not realize the full benefits of the acquisitions, including the synergies, operating efficiencies, or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. 34 We depend on our teaming arrangements and relationships with other contractors and subcontractors.
There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as a cybersecurity services contractor, we hold classified, controlled unclassified and other sensitive information.
There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as a cyber services contractor, we hold classified, controlled unclassified and other sensitive information.
To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract. Risks Related to Our Operations and Markets Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.
To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract. 29 Risks Related to Our Operations and Markets Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.
Moreover, shifts in the buying practices of government agencies, such as increased usage of fixed price contracts, multiple award contracts and small business set-aside contracts, could have adverse effects on government contractors, including us. Any of these changes could impair our ability to obtain new contracts or contract renewals.
Moreover, shifts in the buying practices of government agencies, such as increased usage of fixed price contracts, multiple award contracts and small business set-aside contracts, could have adverse effects on government contractors, including us. Any of these changes could impair our ability to obtain new 27 contracts or contract renewals.
Our ability to effectively serve our clients is dependent upon our ability to successfully leverage our operating model across all of these and any future locations, maintain effective management controls over all of our locations to ensure, among other things, compliance with applicable 30 laws, rules and regulations, and instill our core values in all of our personnel at each of these and any future locations.
Our ability to effectively serve our clients is dependent upon our ability to successfully leverage our operating model across all of these and any future locations, maintain effective management controls over all of our locations to ensure, among other things, compliance with applicable laws, rules and regulations, and instill our core values in all of our personnel at each of these and any future locations.
We 31 compete with larger companies that have greater name recognition, financial resources and larger technical staffs and with smaller, more specialized companies that are able to concentrate their resources on particular areas. Additionally, we may compete with a government’s own capabilities. Technology-focused companies may also develop products and services that could disrupt our business or compete with our services.
We compete with larger companies that have greater name recognition, financial resources and larger technical staffs and with smaller, more specialized companies that are able to concentrate their resources on particular areas. Additionally, we may compete with a government’s own capabilities. Technology-focused companies may also develop products and services that could disrupt our business or compete with our services.
These actions, if required, may be costly or unavailable on terms acceptable to us. Risks Related to International Operations Our operations outside the United States expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.
These actions, if required, may be costly or unavailable on terms acceptable to us. 40 Risks Related to International Operations Our operations outside the United States expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.
Any of these factors could have a material adverse effect on our business, financial condition or results of operations. 40 We have operations in the Middle East, neighboring regions, and other regions across the globe, and these regions may experience turmoil, political upheaval or similar crises that may impact our current projects, future business and financial stability.
Any of these factors could have a material adverse effect on our business, financial condition or results of operations. We have operations in the Middle East, neighboring regions, and other regions across the globe, and these regions may experience turmoil, political upheaval or similar crises that may impact our current projects, future business and financial stability.
A finding of significant control deficiencies in a contractor’s business systems or a 27 finding of noncompliance with U.S. government Cost Accounting Standards, or CAS, can result in decremented billing rates to U.S. government customers until the control deficiencies are corrected and their remediation is accepted by the Defense Contract Management Agency.
A finding of significant control deficiencies in a contractor’s business systems or a finding of noncompliance with U.S. government Cost Accounting Standards, or CAS, can result in decremented billing rates to U.S. government customers until the control deficiencies are corrected and their remediation is accepted by the Defense Contract Management Agency.
These factors could potentially adversely impact the business and operations of a joint venture and, in turn, our business and operations. Operating through joint ventures in which we are a minority holder results in us having limited control over many decisions made with respect to projects and internal controls relating to projects.
These factors 33 could potentially adversely impact the business and operations of a joint venture and, in turn, our business and operations. Operating through joint ventures in which we are a minority holder results in us having limited control over many decisions made with respect to projects and internal controls relating to projects.
In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits. 37 Adverse judgments or settlements in legal disputes could result in materially adverse monetary damages or injunctive relief and damage our reputation.
In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits. Adverse judgments or settlements in legal disputes could result in materially adverse monetary damages or injunctive relief and damage our reputation.
In particular, with regard to our largest single customer, the U.S. federal government, budget deficits, the national debt and the prevailing economic condition, and actions taken to address them, could continue to negatively affect the U.S. government expenditures on defense, intelligence and civil programs for which we provide support.
In particular, with regard to our largest single customer, the U.S. federal government, budget deficits, the national debt and the prevailing economic condition, and actions taken to address them, could negatively affect the U.S. government expenditures on defense, intelligence, and civil programs for which we provide support.
In April 2022, the board of directors approved an amendment providing for lump sum distributions to participants and removing the annual installments. Annual diversification elections and five-year vested termination distributions are not impacted by this amendment and will still occur annually and over installments as outlined in the Plan.
In April 2022, the board of directors approved an amendment providing for lump sum distributions to participants and removing the annual 47 installments. Annual diversification elections and five-year vested termination distributions are not impacted by this amendment and will still occur annually and over installments as outlined in the Plan.
Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our intellectual property or 39 otherwise take appropriate steps to enforce our rights.
Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our intellectual property or otherwise take appropriate steps to enforce our rights.
In addition, headcount growth is the 41 primary means by which we are able to achieve revenue growth. Any inability to hire additional appropriately qualified personnel or failure to timely and effectively deploy such additional personnel against funded backlog could negatively affect our ability to grow our revenue.
In addition, headcount growth is the primary means by which we are able to achieve revenue growth. Any inability to hire additional appropriately qualified personnel or failure to timely and effectively deploy such additional personnel against funded backlog could negatively affect our ability to grow our revenue.
In addition, the relationships and reputation that many members of our senior management team have established and maintain with our clients are important to our business and our ability to identify new business opportunities. We do not have any employment agreements providing for a specific term of employment with any members of our senior management.
In addition, the relationships and reputation that many members of our senior management team have established and maintain with our clients are important to our business 44 and our ability to identify new business opportunities. We do not have any employment agreements providing for a specific term of employment with any members of our senior management.
If our reputation or relationships with government 26 agencies were to be negatively affected, or if we are suspended or debarred from contracting with government agencies for any reason, the amount of business with government and other customers would decrease and our financial condition and results of operations could be adversely affected.
If our reputation or relationships with government agencies were to be negatively affected, or if we are suspended or debarred from contracting with government agencies for any reason, the amount of business with government and other customers would decrease and our financial condition and results of operations could be adversely affected.
Consequently, investors may need to sell all or part of their holdings of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.
Consequently, investors may need to sell all or part of their holdings of our 50 common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.
Health emergencies may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K for the year ended December 31, 2023, such as those relating to government spending and priorities.
Health emergencies may also have the effect of heightening many of 24 the other risks described in this Annual Report on Form 10-K for the year ended December 31, 2023, such as those relating to government spending and priorities.
As such, the ESOP Trustee may be able to exercise a greater influence than otherwise over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. 47 The purpose of the ESOP is to provide retirement income to employees and their beneficiaries.
As such, the ESOP Trustee may be able to exercise a greater influence than otherwise over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. The purpose of the ESOP is to provide retirement income to employees and their beneficiaries.
Environmental Protection Agency, or the EPA, and analogous 38 state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve difficult and costly compliance measures or corrective actions.
Environmental Protection Agency, or the EPA, and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve difficult and costly compliance measures or corrective actions.
In addition, the overall integration of the businesses may result in 33 material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships and diversion of management’s attention, among other potential adverse consequences.
In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships and diversion of management’s attention, among other potential adverse consequences.
Risk Factors Summary The following is a summary of the principal risks that could adversely affect our business, operations and financial results. 22 Risk Relating to Our Business • Government spending and priorities could change in a manner that adversely affects our future revenue and limits our growth prospects. • The U.S. federal government and its agencies collectively are our largest single customer and, if our reputation or relationships with the U.S. federal government were harmed, our future revenues and cash flows would be adversely affected. • Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts and suspension or debarment from government contracting. • A substantial portion of our business is subject to reviews, audits and cost adjustments by government agencies, which, if resolved unfavorably to us, could adversely affect our profitability, cash flows or growth prospects. • Our government contracts may be terminated by the government counterparty at any time and may contain other provisions permitting the government to discontinue contract performance, and if lost contracts are not replaced, our operating results may differ materially and adversely from those anticipated. • Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications, we and they need to perform services for our customers. • We may make acquisitions, investments, joint ventures and divestitures in the future that involve numerous risks, which if realized, may adversely affect our business and our future results. • Our acquisitions may not achieve their full intended benefits or may disrupt our plans and operations. • We conduct a portion of our work through joint venture entities, some of which we do not have management control over, and with which we typically have joint and several liability with our joint venture partners. • Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately estimate and manage costs, time and resources. • We use estimates in recognizing revenues and, if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected. • Systems that we develop, integrate, maintain, or otherwise support could experience security breaches which may damage our reputation with our clients and hinder future contract win rates. • Services we provide and technologies we develop are designed to detect and monitor threats to our clients, the failure of which may lead to reputational harm or liability against us by our clients or third parties and may subject our staff to potential threats, risk of loss or harm. • Internal system or service failures affecting us or our vendors, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations. • Our business is subject to numerous legal and regulatory requirements and any violation of these requirements or any misconduct by our employees, subcontractors, agents or business partners could harm our business and reputation. 23 • Our business is subject the impact of supply chain disruption and inflation risk upon the cost of providing materials and services to customers and upon the profitability for certain contracts. • Goodwill and intangible assets represent a significant amount of our total assets, and any impairment of these assets would negatively impact our results of operations. • We depend on our teaming arrangements and relationships with other contractors and subcontractors.
Risk Relating to Our Business • Government spending and priorities could change in a manner that adversely affects our future revenue and limits our growth prospects. • The U.S. federal government and its agencies collectively are our largest single customer and, if our reputation or relationships with the U.S. federal government were harmed, our future revenues and cash flows would be adversely affected. • Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts, and suspension or debarment from government contracting. • A substantial portion of our business is subject to reviews, audits, and cost adjustments by government agencies, which, if resolved unfavorably to us, could adversely affect our profitability, cash flows or growth prospects. • Our government contracts may be terminated by the government counterparty at any time and may contain other provisions permitting the government to discontinue contract performance, and if lost contracts are not replaced, our operating results may differ materially and adversely from those anticipated. • Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications, we and they need to perform services for our customers. • We may make acquisitions, investments, joint ventures and divestitures in the future that involve numerous risks, which if realized, may adversely affect our business and our future results. • Our acquisitions may not achieve their full intended benefits or may disrupt our plans and operations. • We conduct a portion of our work through joint venture entities, some of which we do not have management control over, and with which we typically have joint and several liability with our joint venture partners. • Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately estimate and manage costs, time and resources. • We use estimates in recognizing revenues and, if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected. • Systems that we develop, integrate, maintain, or otherwise support could experience security breaches which may damage our reputation with our clients and hinder future contract win rates. • Services we provide and technologies we develop are designed to detect and monitor threats to our clients, the failure of which may lead to reputational harm or liability against us by our clients or third parties and may subject our staff to potential threats, risk of loss or harm. • Internal system or service failures affecting us or our vendors, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations. 23 • Our business is subject to numerous legal and regulatory requirements and any violation of these requirements or any misconduct by our employees, subcontractors, agents, or business partners could harm our business and reputation. • Our business is subject the impact of supply chain disruption and inflation risk upon the cost of providing materials and services to customers and upon the profitability for certain contracts. • Our business may be impacted by the imposition of tariffs upon markets in which we conduct business. • Goodwill and intangible assets represent a significant amount of our total assets, and any impairment of these assets would negatively impact our results of operations. • We depend on our teaming arrangements and relationships with other contractors and subcontractors.
Work for non-government and commercial clients involving the protection of 35 information systems or that store clients’ information could also be harmed due to associated security breaches.
Work for non-government and commercial clients involving the protection of information systems or that store clients’ information could also be harmed due to associated security breaches.
In addition to government contract procurement laws and regulations, we are subject to numerous other federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anti-corruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition.
In addition to government contract procurement laws and regulations, we are subject to numerous other federal, state and foreign legal requirements on matters as varied as data privacy and protection, employment and labor relations, immigration, taxation, anti-corruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition.
Government funding with respect to our Critical Infrastructure services fluctuates over time and new or changing government policies may affect our Critical Infrastructure business and operations.
Government funding with respect to our Critical Infrastructure services fluctuates over time and new or changing government policies and priorities may affect our Critical Infrastructure business and operations.
Additionally, the possibility exists that our competitors might develop new capabilities or service offerings that might cause our existing capabilities and service offerings to become obsolete.
Additionally, the possibility exists that our competitors might develop new capabilities or service offerings that might cause our existing capabilities 30 and service offerings to become obsolete.
Compliance with diverse and changing legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation.
Compliance with complex and changing legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation.
In fiscal 2023, 2022 and 2021, we made annual contributions to the ESOP in shares of our common stock in the amount of 8% of the participants’ cash compensation for the applicable year (net of shares forfeited by participants in the applicable year).
In fiscal 2024, 2023 and 2022, we made annual contributions to the ESOP in shares of our common stock in the amount of 8% of the participants’ cash compensation for the applicable year (net of shares forfeited by participants in the applicable year).
We conduct a portion of our work through joint venture entities, some of which we do not have management control over, and with which we typically have joint and several liability with our joint venture partners. 13% of our revenue during fiscal 2023, 12% of our revenue during fiscal 2022 and 11% of our revenue during fiscal 2021 was derived from our operations through consolidated joint ventures.
We conduct a portion of our work through joint venture entities, some of which we do not have management control over, and with which we typically have joint and several liability with our joint venture partners. 12% of our revenue during fiscal 2024, 13% of our revenue during fiscal 2023 and 12% of our revenue during fiscal 2022 was derived from our operations through consolidated joint ventures.
Our common stock has one vote per share. The ESOP beneficially owns approximately 57% of our outstanding common stock, 40% of which is owned by current employees of Parsons Corporation.
Our common stock has one vote per share. The ESOP beneficially owns approximately 51% of our outstanding common stock, 40% of which is owned by current employees of Parsons Corporation.
If we identify material weaknesses in our internal control over financial reporting, or if we are unable to comply in a timely manner with the management certification requirements of Section 404 of the Sarbanes-Oxley Act as to the effectiveness of our internal control over financial reporting or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected, and we could become subject to investigations by our stock exchange, the SEC or other regulatory authorities, which could require additional financial and management resources.
If we identify material weaknesses in our internal control over financial reporting, or if we are unable to comply in a timely manner with the management certification requirements of Section 404 of the Sarbanes-Oxley Act as to the effectiveness of our internal control over financial reporting or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected, and we could become subject to investigations by our stock exchange, the SEC or other regulatory authorities, which could require additional financial and management resources. 45 If our stock price fluctuates, you could lose a significant part of your investment.
These joint ventures from time to time may borrow money to help finance their activities and, in some circumstances, we may be required to provide guarantees of the obligations of our affiliated entities. As of December 31, 2023, we had $147.7 million of letters of credit and guarantees that relate to joint ventures.
These joint ventures from time to time may borrow money to help finance their activities and, in some circumstances, we may be required to provide guarantees of the obligations of our affiliated entities. As of December 31, 2024, we had $176.7 million of letters of credit and guarantees that relate to joint ventures.
The issuance of additional stock, not reserved for issuance under our equity incentive plans or otherwise, will dilute all other stockholdings. We have an aggregate of 853,658,637 shares of common stock authorized but not outstanding and not reserved for issuance under our 2021 Plan, under our existing Incentive Plans or otherwise.
The issuance of additional stock, not reserved for issuance under our equity incentive plans or otherwise, will dilute all other stockholdings. We have an aggregate of 853,343,775 shares of common stock authorized but not outstanding and not reserved for issuance under our 2021 Plan, under our existing Incentive Plans or otherwise.
The ESOP holds common stock representing approximately 57% of the voting power of our common stock as of December 31, 2023. As a result, we are considered a “controlled company” for the purposes of New York Stock Exchange (“NYSE”) rules and corporate governance standards.
The ESOP holds common stock representing approximately 51% of the voting power of our common stock as of December 31, 2024. As a result, we are considered a “controlled company” for the purposes of New York Stock Exchange (“NYSE”) rules and corporate governance standards.
In addition, 3.9% of our revenue during fiscal 2023, 5.1% of our revenue during fiscal 2022 and 5.6% of our revenues in fiscal 2021 related to services we provided to our unconsolidated joint ventures, where control resides with unaffiliated third parties, and 16.6% of our operating income during fiscal 2023, 8.8% of our operating income during fiscal 2022 and 27.8% of our operating income during fiscal 2021 was derived from equity in our unconsolidated joint ventures.
In addition, 2.7% of our revenue during fiscal 2024, 3.9% of our revenue during fiscal 2023 and 5.1% of our revenues in fiscal 2022 related to services we provided to our unconsolidated joint ventures, where control resides with unaffiliated third parties, and 5.5% of our operating income during fiscal 2024, 16.6% of our operating income during fiscal 2023 and 8.8% of our operating income during fiscal 2022 was derived from equity in our unconsolidated joint ventures.
As of December 31, 2023, our total backlog was $8.6 billion, of which $5.0 billion was funded. Our backlog includes orders under contracts that can extend for several years. We historically have not realized all of the revenue included in our total backlog, and we may not realize all of the revenue included in our total backlog in the future.
As of December 31, 2024, our total backlog was $8.9 billion, of which $5.9 billion was funded. Our backlog includes orders under contracts that can extend for several years. We historically have not realized all of the revenue included in our total backlog, and we may not realize all of the revenue included in our total backlog in the future.
While fixed-price 34 contracts allow us to benefit from cost savings, these contracts also increase our exposure to the risk of cost overruns. Revenue derived from fixed-price contracts represented 33% of our total revenue during fiscal 2023, 27% of our total revenue during fiscal 2022, and 26% of our total revenue during fiscal 2021.
While fixed-price contracts allow us to benefit from cost savings, these contracts also increase our exposure to the risk of cost overruns. Revenue derived from fixed-price contracts represented 42% of our total revenue during fiscal 2024, 33% of our total revenue during fiscal 2023, and 27% of our total revenue during fiscal 2022.
The agreements governing our debt contain a number of restrictive covenants which may limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest. As of December 31, 2023, our total indebtedness was approximately $746 million.
The agreements governing our debt contain a number of restrictive covenants which may limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest. As of December 31, 2024, our total indebtedness was approximately $1.2 billion.
If our or our vendors’ systems, services or other applications have significant defects or errors, are successfully attacked by cyber and other security threats, suffer delivery delays or otherwise fail to meet our clients’ expectations, we may: • lose revenue due to adverse client reaction; 36 • be required to provide additional services to a client at no charge; • incur additional costs related to remediation, monitoring and increasing our cybersecurity; • lose revenue due to the deployment of internal staff for remediation efforts instead of client assignments; • receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients; • be unable to successfully market services that are reliant on the creation and maintaining of secure information technology systems to government and commercial clients; • suffer claims by clients or impacted third parties for substantial damages, particularly as a result of any successful network or systems breach and exfiltration of client and/or third-party information; or • incur significant costs, including fines from government regulators related to complying with applicable federal or state law, including laws pertaining to the security and protection of personal information.
If our or our vendors’ systems, services or other applications have significant defects or errors, are successfully attacked by cyber and other security threats, suffer delivery delays or otherwise fail to meet our clients’ expectations, we may: • lose revenue due to adverse client reaction; • be required to provide additional services to a client at no charge; • incur additional costs related to remediation, monitoring and increasing our cybersecurity; • lose revenue due to the deployment of internal staff for remediation efforts instead of client assignments; • receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients; • be unable to successfully market services that are reliant on the creation and maintaining of secure information technology systems to government and commercial clients; • suffer claims by clients or impacted third parties for substantial damages, particularly as a result of any successful network or systems breach and exfiltration of client and/or third-party information; or • incur significant costs, including fines from government regulators related to complying with applicable federal or state law, including laws pertaining to the security and protection of personal information. 37 In addition to any costs resulting from contract performance or required corrective action, these failures may result in increased costs or loss of revenue if they result in clients postponing subsequently scheduled work or canceling or failing to renew contracts.
Department of Defense, the Federal Aviation Administration, the United States intelligence community and the U.S. Department of Energy are key factors in maintaining and growing these revenues and winning new bids for new business. Negative press reports or publicity, regardless of accuracy, could harm our reputation.
Department of State, the Federal Aviation Administration, the United States Intelligence Community, and other federal civilian customers are key factors in maintaining and growing these revenues and winning new bids for new business. Negative press reports or publicity, regardless of accuracy, could harm our reputation.
We made contributions of 915,113 shares in fiscal 2023, 1,188,129 shares in fiscal 2022, and 1,631,477 shares in fiscal 2021 of our common stock to the ESOP and intend to continue to make annual contributions in shares of our common stock to the ESOP.
We made contributions of 633,033 shares in fiscal 2024, 915,113 shares in fiscal 2023, and 1,188,129 shares in fiscal 2022 of our common stock to the ESOP and intend to continue to make annual contributions in shares of our common stock to the ESOP.
Revenue attributable to our services provided outside of the United States as a percentage of our total revenue was 24.4% in 2023, 24.9% in 2022 and 25.0% in 2021.
Revenue attributable to our services provided outside of the United States as a percentage of our total revenue was 22.6% in 2024, 24.4% in 2023 and 24.9% in 2022.
We depend on the timely collection of our receivables to generate cash flow, provide working capital and continue our business operations. If our customers fail to pay or delay the payment of invoices for any reason, our business and financial condition may be materially and adversely affected.
As of December 31, 2024, our accounts receivable, net was $1.1 billion We depend on the timely collection of our receivables to generate cash flow, provide working capital and continue our business operations. If our customers fail to pay or delay the payment of invoices for any reason, our business and financial condition may be materially and adversely affected.
Our ability to comply with these ratios may be affected by events beyond our control. 42 These restrictions could limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans and could adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.
These restrictions could limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans and could adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.
As of December 31, 2023, we had goodwill and intangible assets of $2.1 billion. Goodwill is tested for impairment annually, or more often if indicators of potential impairment exist, and intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Goodwill is tested for impairment annually, or more often if indicators of potential impairment exist, and intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Among the factors that may adversely affect our business, financial condition or results of operations could be unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, damage to our reputation and repayment to the customer of contract cost and fee payments we previously received.
Among the factors that may adversely affect our business, financial condition or results of operations could be unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, damage to our reputation and repayment to the customer of contract cost and fee payments we previously received. 31 We face aggressive competition that can impact our ability to obtain contracts and may affect our future revenues, profitability and growth prospects.
Qualifying ESOP participants have the right to receive distributions of shares of our common stock from the ESOP and can sell such shares in the market. As of December 31, 2023, there were 59,879,857 shares of common stock held in the ESOP.
Qualifying ESOP participants have the right to receive distributions of shares of our common stock from the ESOP and can sell such shares in the market. As of December 31, 2024, there were 54,117,904 shares of common stock held in the ESOP.
Acts of terrorism and threats of armed conflicts in or around various areas in which we operate could limit or disrupt markets and our operations, including disruptions resulting from the evacuation of personnel, cancellation of contracts, or the loss of key employees, contractors or assets.
Acts of terrorism and threats of armed conflicts in or around various areas in which we operate could limit or disrupt markets and our operations, including disruptions resulting from the evacuation of personnel, cancellation of contracts, or the loss of key employees, contractors or assets. 41 We operate in many different jurisdictions, and we could be adversely affected by violations of the U.S.
More generally, any increased or unexpected costs or unanticipated delays in connection with the performance of our contracts, including costs and delays caused by contractual disputes or other factors outside of our control, such as performance failures of our subcontractors, natural disasters or other force majeure events, could make our contracts less profitable than expected or unprofitable.
More generally, any increased or unexpected costs or unanticipated delays in connection with the performance of our contracts, including costs and delays caused by contractual disputes or other factors outside of our control, such as performance failures of our subcontractors, natural disasters or other force majeure events, could make our contracts less profitable than expected or unprofitable. 35 We use estimates in recognizing revenues and, if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.
Furthermore, even if our backlog results in revenue, the contracts may not be profitable. If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations. As of December 31, 2023, our accounts receivable, net was $915.6 million.
Furthermore, even if our backlog results in revenue, the contracts may not be profitable. 42 If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations.
To remain competitive, we must consistently provide superior service, technology and performance on a cost-effective basis to our customers and there is no assurance that we will do so. Changing global tax laws could have a material impact on our effective income tax rate. We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
To remain competitive, we must consistently provide superior service, technology and performance on a cost-effective basis to our customers and there is no assurance that we will do so. Changes in global tax laws or their interpretation could have a material impact on our effective income tax rate.
Any adjustment as a result of a change in estimate is recognized immediately. Changes in the underlying assumptions, circumstances or estimates could result in adjustments that may adversely affect our financial results of operations. Goodwill and intangible assets represent a significant amount of our total assets and any impairment of these assets would negatively impact our results of operations.
Changes in the underlying assumptions, circumstances or estimates could result in adjustments that may adversely affect our financial results of operations. Goodwill and intangible assets represent a significant amount of our total assets and any impairment of these assets would negatively impact our results of operations. As of December 31, 2024, we had goodwill and intangible assets of $2.4 billion.
Bribery Act of 2010, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
Foreign Corrupt Practices Act and similar worldwide anti-corruption laws. The FCPA and similar worldwide anti-corruption laws, including the U.K. Bribery Act of 2010, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following civil actions: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, employees or agents or our stockholders; • any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or • any action asserting a claim governed by the internal affairs doctrine. 49 This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following civil actions: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, employees or agents or our stockholders; • any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or • any action asserting a claim governed by the internal affairs doctrine.
If an event of default occurs, our creditors could elect to: • declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable; • require us to apply all of our available cash to repay the borrowings; or • prevent us from making debt service payments on some of our borrowings.
If an event of default occurs, our creditors could elect to: • declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable; • require us to apply all of our available cash to repay the borrowings; or • prevent us from making debt service payments on some of our borrowings. 43 If we were unable to repay or otherwise refinance these borrowings when due, the lenders under our Credit Agreement could demand payment from subsidiary guarantors, as provided under our Credit Agreement.
The ESOP is a defined contribution retirement plan subject to the requirements of the Internal Revenue Code (Code) and the Employment Retirement Income Security Act (ERISA).
If the ESOP failed to meet the requirements of a tax qualified retirement plan, we could be subject to substantial penalties. The ESOP is a defined contribution retirement plan subject to the requirements of the Internal Revenue Code (Code) and the Employment Retirement Income Security Act (ERISA).
In addition, our Credit Agreement also requires us to comply with certain financial ratio covenants, including a debt leverage ratio and a interest charge coverage ratio.
In addition, our Credit Agreement also requires us to comply with certain financial ratio covenants, including a debt leverage ratio and an interest charge coverage ratio. Our ability to comply with these ratios may be affected by events beyond our control.
These or other factors could cause our defense, intelligence, infrastructure or civil clients to decrease the number of new government contracts awarded generally and fail to award us new government contracts, reduce their purchases under our existing government contracts, exercise their right to terminate our government contracts or not exercise options to renew our government contracts, any of which could materially and adversely affect our business, financial condition and results of operations.
These or other factors could cause our defense, intelligence, infrastructure or civil clients to decrease the number of new government contracts awarded generally and fail to award us new government contracts, reduce their purchases under our existing government contracts, exercise their right to terminate our government contracts or not exercise options to renew our government contracts, any of which could materially and adversely affect our business, financial condition and results of operations. 26 The U.S. federal government and its agencies collectively are our largest single customer and, if our reputation or relationships with the U.S. federal government were harmed, our future revenues and cash flows would be adversely affected.
In particular, it represents substantially all of the revenue of our Federal Solutions segment. Approximately 18% and 17% of accounts receivable as of December 31, 2023 and December 31, 2022, respectively were derived from contracts with the U.S. federal government and its agencies. Our reputation and relationships with various U.S. government entities and agencies, and in particular with the U.S.
Approximately 23% and 18% of accounts receivable as of December 31, 2024 and December 31, 2023, respectively were derived from contracts with the U.S. federal government and its agencies. Our reputation and relationships with various U.S. government entities and agencies, including the U.S. Department of Defense, the U.S.
Internal system or service failures affecting us or our vendors, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.
In addition, as a result of our involvement with some clients or projects, our staff, information and facilities may be targeted by these or other threat actors and may be at risk for loss, or physical or reputational harm. 36 Internal system or service failures affecting us or our vendors, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.
Furthermore, any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future.
Furthermore, any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future. 38 Our business is subject to numerous legal and regulatory requirements and any violation of these requirements or any misconduct by our employees, subcontractors, agents or business partners could harm our business and reputation.
As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each fiscal year.
In addition, public-supported financing such as state and local municipal bonds may be only partially raised to support existing infrastructure projects. As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each fiscal year.
For example, the U.S. government increasingly relies on IDIQ, GSA Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure.
We expect that a majority of the business that we seek in the foreseeable future will be awarded through a competitive bidding process. For example, the U.S. government increasingly relies on IDIQ, GSA Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure.
Negotiations with labor unions and possible work actions could divert management attention and disrupt operations. In addition, new collective bargaining agreements or amendments to existing agreements could increase our labor costs and operating expenses.
Negotiations with labor unions and possible work actions could divert management attention and disrupt operations. In addition, new collective bargaining agreements or amendments to existing agreements could increase our labor costs and operating expenses. We are signatory to approximately fourteen active union collective bargaining agreements as of December 31, 2024 and employ more than 300 employees represented by unions.
Prior to our initial public offering, we were 100% owned by the ESOP, which is a retirement plan that is intended to be qualified under the Internal Revenue Code. If the ESOP failed to meet the requirements of a tax qualified retirement plan, we could be subject to substantial penalties.
These guarantors constitute substantially all of our domestic, wholly owned subsidiaries’ assets. Prior to our initial public offering, we were 100% owned by the ESOP, which is a retirement plan that is intended to be qualified under the Internal Revenue Code.
Many tax jurisdictions, including the U.S., have called for comprehensive changes to fiscal and tax policies that could significantly impact how we are taxed on our domestic and foreign earnings. Such changes, if enacted into law, could increase our effective tax rate and have a material adverse impact on our financial condition and results of operations.
Due to economic and political conditions, many tax jurisdictions, including the U.S., have called for comprehensive changes to fiscal and tax policies that could significantly impact how we are taxed on our domestic and foreign earnings.
Any failure to do so could impair our ability to efficiently perform our contractual obligations, timely meet our customers’ needs and ultimately win new business, all of which could adversely affect our business, financial condition and results of operations. 43 We believe that our success also depends on the continued employment of a highly qualified and experienced senior management team and that team’s ability to retain existing business and generate new business.
Any failure to do so could impair our ability to efficiently perform our contractual obligations, timely meet our customers’ needs and ultimately win new business, all of which could adversely affect our business, financial condition and results of operations.
In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. 22 Risk Factors Summary The following is a summary of the principal risks that could adversely affect our business, operations and financial results.
As a result, our failure to maintain adequate safety standards and equipment could result in reduced profitability or the loss of projects or clients and could have a material adverse impact on our business, financial condition, and results of operations. 44 Risk Related to Our Common Stock If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
Risk Related to Our Common Stock If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

… 33 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Pro perties. Our headquarters are located in Chantilly, Virginia. As of December 31, 2023, we leased 272 commercial facilities (including our headquarters) with an aggregate of approximately 2.6 million square feet of space across 36 U.S. states and 16 countries used in connection with the various services rendered to our customers.
Biggest changeItem 2. Pro perties. Our headquarters are located in Chantilly, Virginia. As of December 31, 2024, we leased 246 commercial facilities (including our headquarters) with an aggregate of approximately 2.7 million square feet of space across 38 U.S. states and 15 countries used in connection with the various services rendered to our customers.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+2 added−1 removed5 unchanged
Biggest changeOn November 28, 2023, a Proposed Statement of Decision was filed with the clerk of the Superior Court of the State of California In and For the County of San Mateo proposing an award of damages in the total amount of approximately $102.5 million in favor of Parsons Transportation Group, Inc. and against Alstom Signaling Operations LLC (Alstom") (including approximately $62.5 million relating to claims assigned to Parsons pursuant to a prior settlement with the Peninsula Corridor Joint Powers Board and approximately $40 million attributable to Parsons’ contractual and indemnification claims).
Biggest changeOn July 1, 2024, a final judgment was filed with the clerk of the Superior Court of the State of California In and For the County of San Mateo with an award of damages in the total amount of approximately $102.5 million in favor of Parsons Transportation Group, Inc. and against Alstom Signaling Operations LLC (Alstom").
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 lawsuit sought (i) that we cease and desist from violating the False 52 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.
Although the outcome of any such matter is inherently 51 uncertain and may be materially adverse, based on current information, except as noted below, we believe there are no pending lawsuits or claims that may have a material adverse effect on our business, financial condition or results of operations.
Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, except as noted below, we believe there are no pending lawsuits or claims that may have a material adverse effect on our business, financial condition or results of operations.
The United States government did not intervene in this matter as it is allowed to do so under the statute. The court heard dispositive motions in 2023, including Parsons’ motion for summary judgment. We are awaiting the court’s rulings upon such motions, which will determine whether a trial will be necessary for this matter in 2024.
The United States government did not intervene in this matter as it is allowed to do so under the statute. The court heard dispositive motions in 2023, including Parsons’ motion for summary judgment. We are awaiting the court’s rulings upon such motions, which will determine whether a trial will be necessary for this matter in 2025.
Removed
Alstom filed objections to the Proposed Statement of Decision, and Parsons has filed its responses to the objections. It is anticipated that the court will enter a final decision in the first quarter of 2024. At this time, the Company is unable to determine the probability of the outcome of the litigation. Item 4. Mine Safe ty Disclosures.
Added
On September 23, 2024, the Court awarded pre-judgment interest in the amount of $34.0 million and amended the judgment accordingly to include such interest. Alstom filed a Notice of Appeal and has posted a bond as required under California law. At this time, the Company is unable to determine the probability of the outcome of the litigation. Item 4.
Added
Mine Safe ty Disclosures. Not Applicable. 53 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+1 added−2 removed2 unchanged
Biggest changeThe 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. 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.
Biggest changeThe 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.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the NYSE under the ticker symbol “PSN”. Dividend Policy During the years ended December 31, 2023, 2022 and 2021, the Company did not declare any dividends.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the NYSE under the ticker symbol “PSN”. Dividend Policy During the years ended December 31, 2024, 2023 and 2022, the Company did not declare any dividends.
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities 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 $100,000,000 from time to time, commencing on August 12, 2021.
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities 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.
Shareholders According to the records of our transfer agent, there were three shareholders of record as of February 5, 2024. Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information as of December 31, 2023 regarding compensation plans under which our equity securities are authorized for issuance.
Shareholders According to the records of our transfer agent, there were three shareholders of record as of February 11, 2025. Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information as of December 31, 2024 regarding compensation plans under which our equity securities are authorized for issuance.
The graph assumes that the value of the initial investment in our common stock and each of the two indexes was $100 on May 8, 2019, the date of the Company’s IPO, and tracks it through December 31, 2023 (including reinvestment of dividends).
The graph assumes that the value of the initial investment in our common stock and each of the two indexes was $100 on December 31, 2019, and tracks it through December 31, 2024 (including reinvestment of dividends).
Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity compensation plans approved by security holders (1) - 1,463,790 (2) Equity compensation plans not approved by security holders 2,093,336 (3) 8,238,003 (4) Total 2,093,336 9,701,793 (1) Consists of the 2020 Employee Stock Purchase Plan.
Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity compensation plans approved by security holders (1) - - 1,367,785 (2) Equity compensation plans not approved by security holders 1,883,018 (3) - 7,651,085 (4) Total 1,883,018 - 9,018,870 (1) Consists of the 2020 Employee Stock Purchase Plan.
(2) Amount represents 1,463,790 shares remaining available for future issuance under the 2020 Employee Stock Purchase Plan (of which 52,364 shares were purchased pursuant to the offering period that ended on December 31, 2023).
(2) Amount represents 1,367,785 shares remaining available for future issuance under the 2020 Employee Stock Purchase Plan (of which 47,860 shares were purchased pursuant to the offering period that ended on December 31, 2024).
As of December 31, 2023, the Company has spent $54.7 million (which includes commissions paid of $29 thousand) repurchasing 1,426,476 shares of Common Stock at an average price of $38.35 per share. The following table presents the Company’s purchase of equity securities for the three months ended December 31, 2023.
As of December 31, 2024, the Company has spent $79.7 million (which includes commissions paid of $34 thousand) repurchasing 1,713,481 shares of Common Stock at an average price of $46.51 per share. The following table presents the Company’s purchase of equity securities for the three months ended December 31, 2024.
(3) Amount represents the sum of 2,093,336 shares of common stock subject to outstanding RSU and PSU awards under the 2019 Incentive Plan (with PSU awards reflected at “target” levels), (4) Amount represents 8,238,003 shares remaining available for future issuance under the 2019 Incentive Plan. 53 Performance Graph The following graph compares the cumulative total return, from the date of the Company’s initial public offering (“IPO”) through December 31, 2023, to shareholders of Parsons Corporation common stock relative to the cumulative total returns of the Russell 2000 Index and the Standard and Poor’s IT Consulting & Other Services Index.
(3) Amount represents the sum of 1,883,018 shares of common stock subject to outstanding RSU and PSU awards under the 2019 Incentive Plan (with PSU awards reflected at “target” levels), (4) Amount represents 7,651,085 shares remaining available for future issuance under the 2019 Incentive Plan. 54 Performance Graph The following graph compares the cumulative total return, from December 31, 2019 through December 31, 2024, to shareholders of Parsons Corporation common stock relative to the cumulative total returns of the Russell 2000 Index and the Standard and Poor’s IT Consulting & Other Services Index.
Period (a) Total number of shares (or units purchased) (b) Average price paid per share (or unit) (1) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans programs October 1 to 31, 2023 - $ - - $ 48,299,563 November 1 to 30, 2023 - $ - - 48,299,563 December 1 to 31, 2023 47,535 $ 63.11 47,535 45,299,670 Total 47,535 $ 63.11 47,535 $ 45,299,670 (1) Includes commissions and calculated at the average price per share Item 6.
Period (a) Total number of shares (or units purchased) (b) Average price paid per share (or unit) (1) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans programs October 1 to 31, 2024 - $ - - $ 90,000,219 November 1 to 30, 2024 104,527 95.67 104,527 80,000,351 December 1 to 31, 2024 51,425 97.22 51,425 75,000,926 Total 155,952 96.18 155,952 $ 75,000,926 (1) Includes commissions and calculated at the average price per share Item 6.
The stock performance included in this graph is not necessarily indicative of future stock price performance. 5/8/19 12/19 12/20 12/21 12/22 12/23 Parsons Corp. 100.00 137.28 121.08 111.91 153.81 208.55 Russell 2000 100.00 105.95 127.10 145.93 116.11 135.76 S&P Composite 1500 IT Consulting & Other Services 100.00 103.18 117.05 161.45 123.35 156.59 54 Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our 2024 Proxy Statement.
The stock performance included in this graph is not necessarily indicative of future stock price performance. 12/19 12/20 12/21 12/22 12/23 12/24 Parsons Corp. 100.00 88.20 81.52 112.04 151.91 223.47 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 S&P Composite 1500 IT Consulting & Other Services 100.00 113.44 156.48 119.55 151.77 172.40 55 Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our 2024 Proxy Statement.
Removed
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.
Added
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.
Removed
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+37 added−29 removed128 unchanged
Biggest changeThe increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to increases in business volume and a decrease in direct cost of contracts of $38 million related to a legal matter on a previously completed contract, offset by write-downs on joint ventures discussed above and higher selling general and administrative costs from business development and sales activities and higher incentive compensation costs as a result of the company's strong operating performance and growing employee base. 70 Year ended December 31, 2022 compared to year ended December 31, 2021 Federal Solutions The Year Ended Variance (U.S. dollars in thousands) December 31, 2022 December 31, 2021 Dollar Percent Revenue $ 2,212,987 $ 1,888,050 $ 324,937 17.2 % Adjusted EBITDA attributable to Parsons Corporation $ 199,004 $ 162,733 $ 36,271 22.3 % The increase in Federal Solutions revenue for the year ended December 31, 2022 compared to the corresponding period last year was primarily due to increases from business acquisitions of $205 million, and increases in business volume from recent contract awards and increased activity on existing contracts.
Biggest changeThe increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to increases in business volume and a decrease in direct cost of contracts of $38 million related to a legal matter on a previously completed contract, offset by write-downs on joint ventures discussed above and higher selling general and administrative costs from business development and sales activities and higher incentive compensation costs as a result of the company's strong operating performance and growing employee base.
Fiscal Year Ended December 31, 2023 December 31, 2022 Revenues 100.0 % 100.0 % Direct costs of contracts 77.8 % 77.4 % Equity in (losses) earnings of unconsolidated joint ventures (0.9 )% 0.4 % Selling, general and administrative expenses 16.0 % 18.5 % Operating income 5.3 % 4.4 % Interest income 0.0 % 0.0 % Interest expense (0.6 )% (0.6 )% Other income, net 0.1 % 0.1 % Total other income benefit (expense) (0.4 )% (0.5 )% Income before income tax expense 4.9 % 4.0 % Income tax expense (1.0 )% (0.9 )% Net income including noncontrolling interests 3.8 % 3.0 % Net income attributable to noncontrolling interests (0.9 )% (0.7 )% Net income attributable to Parsons Corporation 3.0 % 2.3 % Revenue Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 5,442,749 $ 4,195,272 $ 1,247,477 29.7 % Revenue for the year ended December 31, 2023 compared to the prior year increased $1.2 billion.
Fiscal Year Ended December 31, 2023 December 31, 2022 Revenues 100.0 % 100.0 % Direct costs of contracts 77.8 % 77.4 % Equity in earnings of unconsolidated joint ventures (0.9 )% 0.4 % Selling, general and administrative expenses 16.0 % 18.5 % Operating income 5.3 % 4.4 % Interest income 0.0 % 0.0 % Interest expense (0.6 )% (0.6 )% Other income, net 0.1 % 0.1 % Total other income benefit (expense) (0.4 )% (0.5 )% Income before income tax expense 4.9 % 4.0 % Income tax expense (1.0 )% (0.9 )% Net income including noncontrolling interests 3.8 % 3.0 % Net income attributable to noncontrolling interests (0.9 )% (0.7 )% Net income attributable to Parsons Corporation 3.0 % 2.3 % Revenue Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 5,442,749 $ 4,195,272 $ 1,247,477 29.7 % Revenue for the year ended December 31, 2023 compared to the prior year increased $1.2 billion.
The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2023 primarily relates to state income taxes, valuation allowance on foreign tax credit carryovers originating from foreign withholding taxes offset in part by benefits related to income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and federal business tax credits.
The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2023 primarily relates to state income taxes, valuation allowance on foreign tax credit carryovers originating from foreign withholding taxes offset in part by 69 benefits related to income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and federal business tax credits.
Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. The 76 determination of fair values of assets acquired and liabilities assumed requires the Company to make estimates and use valuation techniques when a market value is not readily available.
Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. The determination of fair values of assets acquired and liabilities assumed requires the Company to make estimates and use valuation techniques when a market value is not readily available.
This process requires significant judgments and estimates, including assumptions about our strategic plans for operations as well as the interpretation of current economic indicators. Development of the present value of future cash flow projections includes assumptions and estimates derived from a review of our expected 77 revenue growth rates, profit margins, business plans, cost of capital and tax rates.
This process requires significant judgments and estimates, including assumptions about our strategic plans for operations as well as the interpretation of current economic indicators. Development of the present value of future cash flow projections includes assumptions and estimates derived from a review of our expected revenue growth rates, profit margins, business plans, cost of capital and tax rates.
In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. 61 • Under time-and-materials contracts, hourly billing rates are negotiated and charged to clients based on the actual time spent on a project.
In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. • Under time-and-materials contracts, hourly billing rates are negotiated and charged to clients based on the actual time spent on a project.
Additionally, budget deficits and the growing U.S. national debt increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could in the future delay procurement of the federal government services we provide.
Additionally, budget deficits and the growing U.S. national debt increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could in the future delay procurement of the federal 60 government services we provide.
A reduction in the amount of, or delays, or cancellations of funding for, 59 services that we are contracted to provide to the U.S. government as a result of any of these impacts or related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations.
A reduction in the amount of, or delays, or cancellations of funding for, services that we are contracted to provide to the U.S. government as a result of any of these impacts or related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations.
Liquidity and Capital Resources We currently finance our operations and capital expenditures through a combination of internally generated cash from operations, our Convertible Senior Notes, Delayed Draw Term Loan and periodic borrowings under our Revolving Credit Facility. 71 Generally, cash provided by operating activities has been adequate to fund our operations.
Liquidity and Capital Resources We currently finance our operations and capital expenditures through a combination of internally generated cash from operations, our Convertible Senior Notes, Delayed Draw Term Loan and periodic borrowings under our Revolving Credit Facility. Generally, cash provided by operating activities has been adequate to fund our operations.
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. Accounts receivable is the principal component of our working capital and is generally driven by revenue growth. Accounts receivable includes billed and unbilled amounts.
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. 73 Accounts receivable is the principal component of our working capital and is generally driven by revenue growth. Accounts receivable includes billed and unbilled amounts.
A participant will be able to sell such shares of common stock in the market, subject to any requirements of the federal securities laws. 79 Equity-Based Compensation We measure the value of services received from employees and directors in exchange for an equity-based award based on the grant date fair value.
A participant will be able to sell such shares of common stock in the market, subject to any requirements of the federal securities laws. Equity-Based Compensation We measure the value of services received from employees and directors in exchange for an equity-based award based on the grant date fair value.
We recognize revenue for most of our contracts over time as performance obligations are satisfied, as we are continuously transferring control to the customer. Typically, revenue is recognized over time 75 using an input measure (i.e., costs incurred to date relative to total estimated costs at completion) to measure progress.
We recognize revenue for most of our contracts over time as performance obligations are satisfied, as we are continuously transferring control to the customer. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion) to measure progress.
Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of our estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the date of the applicable acquisitions, if any.
Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of our estimated fair value over carrying value 78 at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the date of the applicable acquisitions, if any.
The financial results of IPKeys have been included in our consolidated results of operations from April 13, 2023 onward. 60 Xator Corporation On May 31, 2022, the Company acquired Xator Corporation for $387.5 million. This strategic acquisition expands Parsons’ presence within the U.S.
The financial results of IPKeys have been included in our consolidated results of operations from April 13, 2023 onward. Xator Corporation On May 31, 2022, the Company acquired Xator Corporation for $387.5 million. This strategic acquisition expands Parsons’ presence within the U.S.
Equity in (losses) earnings of unconsolidated joint ventures Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Equity in (losses) earnings of unconsolidated joint ventures $ (47,751 ) $ 16,347 $ (64,098 ) (392.1 )% 64 Equity in (losses) earnings of unconsolidated joint ventures for the year ended December 31, 2023 decreased by $64.1 million compared to the prior year.
Equity in earnings of unconsolidated joint ventures Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Equity in (losses) earnings of unconsolidated joint ventures $ (47,751 ) $ 16,347 $ (64,098 ) (392.1 )% 68 Equity in earnings of unconsolidated joint ventures for the year ended December 31, 2023 decreased by $64.1 million compared to the prior year.
We consider an accounting policy or estimate to be critical if the policy or estimate requires assumptions to be made that were uncertain at the time they were made and if changes in these assumptions could have a material impact on our financial condition or results of operations.
We consider an accounting policy 75 or estimate to be critical if the policy or estimate requires assumptions to be made that were uncertain at the time they were made and if changes in these assumptions could have a material impact on our financial condition or results of operations.
Revenue Recognition and Cost Estimation In our industry, recognition of revenue and profit on long-term contracts requires the use of assumptions and estimates related to total contract revenue, total cost at completion, and the 74 measurement of progress towards completion. Estimates are continually evaluated as work progresses and are revised when necessary.
Revenue Recognition and Cost Estimation In our industry, recognition of revenue and profit on long-term contracts requires the use of assumptions and estimates related to total contract revenue, total cost at completion, and the measurement of progress towards completion. Estimates are continually evaluated as work progresses and are revised when necessary.
These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation, and expenses related to our corporate restructuring initiatives.
These other items include, among other 70 things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation, and expenses related to our corporate restructuring initiatives.
For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. We have operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment.
For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. 77 We have operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment.
The fair value of this contingent consideration is included as part of the purchase price of the acquired company on the acquisition date and recorded in at its fair value within other liabilities or other long-term liabilities, as appropriate on the consolidated balance sheets.
The fair value of this contingent consideration is included as part of the purchase price of the acquired company on the acquisition date and recorded at its fair value within other liabilities or other long-term liabilities, as appropriate on the consolidated balance sheets.
Our VIEs may be funded through contributions, loans and/or advances from the joint venture 78 partners or by advances and/or letters of credit provided by clients. Certain VIEs are directly governed, managed, operated and administered by the joint venture partners.
Our VIEs may be funded through contributions, loans and/or advances from the joint venture partners or by advances and/or letters of credit provided by clients. Certain VIEs are directly governed, managed, operated and administered by the joint venture partners.
See “Risk Factors—Risks Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue.” 58 The changes in backlog in both the Federal Solutions and Critical Infrastructure segments were primarily from ordinary course fluctuations in our business and the impacts related to the Company’s awards discussed above.
See “Risk Factors—Risks Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue.” 59 The changes in backlog in both the Federal Solutions and Critical Infrastructure segments were primarily from ordinary course fluctuations in our business and the impacts related to the Company’s awards discussed above.
As of December 31, 2023, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility.
As of December 31, 2024, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility.
We perform a goodwill impairment test annually, on October 1 st of each year, for each reporting unit that requires certain assumptions and estimates be made regarding industry economic factors and future profitability. For the years ended December 31, 2023, December 31, 2022 and December 31, 2021, we performed a quantitative analysis for all of our reporting units.
We perform a goodwill impairment test annually, on October 1 st of each year, for each reporting unit that requires certain assumptions and estimates be made regarding industry economic factors and future profitability. For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we performed a quantitative analysis for all of our reporting units.
Management believes that there are no claims or assessments outstanding which would materially affect our consolidated results of operations or our financial position.
Management believes that there are no claims or assessments outstanding which would materially affect our consolidated results of operations or our financial position. 81
By combining our talented team of professionals and advanced technology, we solve complex technical challenges to enable a safer, smarter, more secure and more connected world. 56 We operate in two reporting segments, Federal Solutions and Critical Infrastructure. Our Federal Solutions business is an advanced technology provider to the U.S. government.
By combining our talented team of professionals and advanced technology, we solve complex technical challenges to enable a safer, smarter, more secure and more connected world. 57 We operate in two reporting segments, Federal Solutions and Critical Infrastructure. Our Federal Solutions business is an advanced technology provider to the U.S. government.
Government Spending Changes in the relative mix of government spending and areas of spending growth, with shifts in priorities on homeland security, intelligence, defense-related programs, infrastructure and urbanization, and continued increased spending on technology and innovation, including cybersecurity, artificial intelligence, connected communities and physical infrastructure, could impact our business and results of operations.
Government Spending Changes in the relative mix of government spending and areas of spending growth, with shifts in priorities on homeland security, intelligence, defense-related programs, infrastructure and urbanization, and continued increased spending on technology and innovation, including cyber, artificial intelligence, connected communities and physical infrastructure, could impact our business and results of operations.
The following table sets forth the book-to-bill ratio for the periods presented below: Fiscal Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Federal Solutions 1.1 0.9 1.3 Critical Infrastructure 1.1 1.2 1.2 Overall 1.1 1.0 1.2 Factors and Trends Affecting Our Results of Operations We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section.
The following table sets forth the book-to-bill ratio for the periods presented below: Fiscal Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Federal Solutions 1.0 1.1 0.9 Critical Infrastructure 1.2 1.1 1.2 Overall 1.0 1.1 1.0 Factors and Trends Affecting Our Results of Operations We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section.
Off-Balance Sheet Arrangements As of December 31, 2023, we have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements As of December 31, 2024, we have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Our last review at October 1, 2023 (i.e., the first day of our fourth quarter in fiscal 2023), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill.
Our last review at October 1, 2024 (i.e., the first day of our fourth quarter in fiscal 2024), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill.
Then the finite period cash flows and the terminal value are discounted to present value to arrive at an indication of fair value. We utilized internal financial projections through fiscal 2028. The Market Approach utilizes market comparable transactions and comparable companies to calculate the estimated fair value.
Then the finite period cash flows and the terminal value are discounted to present value to arrive at an indication of fair value. We utilized internal financial projections through fiscal 2029. The Market Approach utilizes market comparable transactions and comparable companies to calculate the estimated fair value.
We deliver innovative technology-driven solutions to customers worldwide. We have developed significant expertise and differentiated capabilities in key areas of cybersecurity and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development.
We deliver innovative technology-driven solutions to customers worldwide. We have developed significant expertise and differentiated capabilities in key areas of cyber and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development.
Our leases have remaining lease terms of one year to eight 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 up to the third year.
Our leases have remaining lease terms of one year to eleven 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 up to the third year.
We expect to recognize $3.8 billion of our funded backlog at December 31, 2023 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.
We expect to recognize $3.9 billion of our funded backlog at December 31, 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.
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.
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.
Total ESOP contribution expense was $58.2 million for 2023, $54.7 million for 2022, and $54.9 million for fiscal 2021, and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.” We expect operating expenses to increase due to our anticipated growth.
Total ESOP contribution expense was $59.8 million for 2024, $58.2 million for 2023, and $54.7 million for fiscal 2022, and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.” We expect operating expenses to increase due to our anticipated growth.
Other income, net primarily consists of gain or loss on sale of assets, sublease income. transaction gain or loss related to movements in foreign currency exchange rates, and contingent consideration. 63 Year ended December 31, 2023 compared to year ended December 31, 2022 The following table sets forth our results of operations for fiscal 2023 and fiscal 2022 as a percentage of revenue.
Other income, net primarily consists of gain or loss on sale of assets, sublease income. transaction gain or loss related to movements in foreign currency exchange rates, contingent consideration and convertible debt repurchase loss. 64 Year ended December 31, 2024 compared to year ended December 31, 2023 The following table sets forth our results of operations for fiscal 2024 and fiscal 2023 as a percentage of revenue.
The table below presents the percentage of total revenue for each type of contract. Fiscal Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Fixed-price 33% 27% 26% Time-and-materials 25% 28% 28% Cost-plus 42% 45% 46% The amount of risk and potential reward varies under each type of contract.
The table below presents the percentage of total revenue for each type of contract. Fiscal Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Fixed-price 42% 33% 27% Time-and-materials 21% 25% 28% Cost-plus 37% 42% 45% The amount of risk and potential reward varies under each type of contract.
Interest expense increased for the year ended December 31, 2023 compared to the corresponding period last year primarily due to higher interest rates on borrowings. The amounts in other income (expense), net, are primarily related to transaction gains and losses on foreign currency transactions, sublease income, and contingent consideration.
Interest expense increased for the year ended December 31, 2023 compared to the corresponding period last year primarily due to higher interest rates on borrowings. The amounts in other income (expense), net, 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.
We focus on collecting outstanding receivables to reduce net DSO and improve working capital. Net DSO was 59 days at December 31, 2023, down from 69 days at December 31, 2022. and 68 days at December 31, 2021.
We focus on collecting outstanding receivables to reduce net DSO and improve working capital. Net DSO was 55 days at December 31, 2024, down from 59 days at December 31, 2023 and 69 days at December 31, 2022.
Non-GAAP Financial Measures: (U.S. dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Other Information: Adjusted EBITDA (1) $ 464,673 $ 352,782 $ 309,720 Net Income Margin (2) 3.8 % 3.0 % 2.4 % Adjusted EBITDA Margin (3) 8.5 % 8.4 % 8.5 % (1) A reconciliation of net income attributable to Parsons Corporation to Adjusted EBITDA is set forth below (in thousands).
Non-GAAP Financial Measures: (U.S. dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Other Information: Adjusted EBITDA (1) $ 604,953 $ 464,673 $ 352,782 Net Income Margin (2) 4.3 % 3.8 % 3.0 % Adjusted EBITDA Margin (3) 9.0 % 8.5 % 8.4 % (1) A reconciliation of net income attributable to Parsons Corporation to Adjusted EBITDA is set forth below (in thousands).
(2) Net Income Margin is calculated as net income including noncontrolling interest divided by revenue in the applicable period.
(2) Net Income Margin is calculated as net income including noncontrolling interest divided by revenue in the applicable period. (3) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue in the applicable period.
The following table sets forth selected key metrics (in thousands, except Book-to-Bill): Period Ended December 31, 2023 December 31, 2022 December 31, 2021 Awards $ 5,996,780 $ 4,274,721 $ 4,565,792 Backlog (1) $ 8,592,271 $ 8,179,245 $ 8,346,937 Book-to-Bill 1.1 1.0 1.2 (1) Difference between our backlog of $8.6 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.4 billion, each as of December 31, 2023, 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.
The following table sets forth selected key metrics (in thousands, except Book-to-Bill): Period Ended December 31, 2024 December 31, 2023 December 31, 2022 Awards $ 7,039,272 $ 5,996,780 $ 4,274,721 Backlog (1) $ 8,893,915 $ 8,592,271 $ 8,179,245 Book-to-Bill 1.0 1.1 1.0 (1) Difference between our backlog of $8.9 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.7 billion, each as of December 31, 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.
Letters of Credit We also 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 $320.7 million as of December 31, 2023. Letters of credit outstanding under the Credit Agreement total $43.8 million.
Letters of Credit We also 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 $328.4 million as of December 31, 2024. Letters of credit outstanding under the Credit Agreement total $43.0 million.
Our effective tax rate was 23.9% and 21.0% for the years ended December 31, 2022 and 2021, respectively.
Our effective tax rate was 21.3% and 23.9% for the years ended December 31, 2023 and 2022, respectively.
Income tax expense Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Income tax expense $ 56,138 $ 39,657 $ 16,481 41.6 % Income tax expense increased in fiscal 2023 primarily due to an increase in overall earnings and an increase in foreign withholding taxes partially offset by increases in the foreign-derived intangible income (FDII) deduction and earnings in lower tax jurisdictions. 65 Our effective tax rate was 21.3% and 23.9% for the years ended December 31, 2023 and 2022, respectively.
Income tax expense Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Income tax expense $ 56,138 $ 39,657 $ 16,481 41.6 % Income tax expense increased in fiscal 2023 primarily due to an increase in overall earnings and an increase in foreign withholding taxes partially offset by increases in the foreign-derived intangible income (FDII) deduction and earnings in lower tax jurisdictions.
Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts. Net cash provided by operating activities increased $170.2 million to $407.7 million during 2023 compared to $237.5 million during 2022.
Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts. Net cash provided by operating activities increased $115.9 million to $523.6 million during 2024 compared to $407.7 million during 2023.
The following table summarizes the total value of new awards for the periods presented below (in thousands): Fiscal Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Federal Solutions $ 3,259,052 $ 1,921,123 $ 2,458,528 Critical Infrastructure 2,737,728 2,353,598 2,107,264 Total Awards $ 5,996,780 $ 4,274,721 $ 4,565,792 The change in new awards from year to year is primarily due to ordinary course fluctuations in our business.
The following table summarizes the total value of new awards for the periods presented below (in thousands): Fiscal Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Federal Solutions $ 3,880,290 $ 3,259,052 $ 1,921,123 Critical Infrastructure 3,158,982 2,737,728 2,353,598 Total Awards $ 7,039,272 $ 5,996,780 $ 4,274,721 The change in new awards from year to year is primarily due to ordinary course fluctuations in our business.
Total other income (expense) Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Interest income $ 2,191 $ 966 $ 1,225 126.8 % Interest expense (31,497 ) (23,185 ) (8,312 ) (35.9 )% Other income (expense), net 5,001 2,775 2,226 80.2 % Total other income (expense) $ (24,305 ) $ (19,444 ) $ (4,861 ) (25.0 )% Interest income increased for the year ended December 31, 2023 compared to the corresponding period last year primarily due to an increase in interest rates compared to the prior year on investments in government money funds.
Total other (expense) income Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Interest income $ 2,191 $ 966 $ 1,225 126.8 % Interest expense (31,497 ) (23,185 ) (8,312 ) (35.9 )% Other income (expense), net 5,001 2,775 2,226 80.2 % Total other income (expense) $ (24,305 ) $ (19,444 ) $ (4,861 ) (25.0 )% Interest income is related to interest earned on investments in government money funds.
Seasonality Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses. The latter issue is typically driven by the U.S. federal government fiscal year-end, September 30.
The financial results of Xator have been included in our consolidated results of operations from May 31, 2022 onward. Seasonality Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses. The latter issue is typically driven by the U.S. federal government fiscal year-end, September 30.
We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Credit Agreement and Delayed Draw Term Loan.
We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Revolving Credit Facility.
The change in new awards in both our Federal Solutions and Critical Infrastructure segments for the year ended December 31, 2023 when compared to the corresponding period last year was primarily driven by an overall increase in the number of large contract awards. 57 Backlog We define backlog to include the following two components: • Funded—Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. • Unfunded—Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized less revenue previously recognized on these contracts.
The change in new awards in both our Federal Solutions and Critical Infrastructure segments for the year ended December 31, 2024 when compared to the corresponding period last year was primarily due to significant option period awards in our Federal Solutions segment and three large transportation awards and a mining award in our Critical Infrastructure segment. 58 Backlog We define backlog to include the following two components: • Funded—Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. • Unfunded—Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized less revenue previously recognized on these contracts.
The following table summarizes the value of our backlog at the respective dates presented (in thousands): As of December 31, 2023 December 31, 2022 December 31, 2021 Federal Solutions: Funded $ 1,454,581 $ 1,257,537 $ 1,414,985 Unfunded 3,490,781 3,586,791 3,906,678 Total Federal Solutions 4,945,362 4,844,328 5,321,663 Critical Infrastructure: Funded 3,578,902 3,280,701 2,957,968 Unfunded 68,007 54,216 67,306 Total Critical Infrastructure 3,646,909 3,334,917 3,025,274 Total Backlog (1) $ 8,592,271 $ 8,179,245 $ 8,346,937 (1) Difference between our backlog of $8.6 billion and our RUPO of $6.4 billion, each as of December 31, 2023, 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.
The following table summarizes the value of our backlog at the respective dates presented (in thousands): As of December 31, 2024 December 31, 2023 December 31, 2022 Federal Solutions: Funded $ 1,712,627 $ 1,454,581 $ 1,257,537 Unfunded 2,961,356 3,490,781 3,586,791 Total Federal Solutions 4,673,983 4,945,362 4,844,328 Critical Infrastructure: Funded 4,167,611 3,578,902 3,280,701 Unfunded 52,321 68,007 54,216 Total Critical Infrastructure 4,219,932 3,646,909 3,334,917 Total Backlog (1) $ 8,893,915 $ 8,592,271 $ 8,179,245 (1) Difference between our backlog of $8.9 billion and our RUPO of $6.7 billion, each as of December 31, 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.
Financing Activities Net cash provided by (used in) financing activities is primarily associated with proceeds from debt, the repayment thereof, transactions related to the Company’s common stock, and contributions by and distributions to noncontrolling interests. Net cash (used in) provided by financing activities changed by $122.2 million to $(21.9) million in 2023 compared to $100.4 million in 2022.
Financing Activities Net cash provided by (used in) financing activities is primarily associated with proceeds from debt, the repayment thereof, transactions related to the Company’s common stock, and contributions by and distributions to noncontrolling interests. Net cash provided by (used in) financing activities increased by $240.6 million to $218.7 million in 2024 compared to $(21.9) million in 2023.
Our working capital (current assets less current liabilities) was $726.6 million at December 31, 2023, $611.7 million at December 31, 2022 and $601.6 million at December 31, 2021. Our cash and cash equivalents increased by $10.4 million to $272.9 million at December 31, 2023 from $262.5 million at December 31, 2022.
Our working capital (current assets less current liabilities) was $546.8 million at December 31, 2024, $726.6 million at December 31, 2023 and $611.7 million at December 31, 2022. Our cash and cash equivalents increased by $180.6 million to $453.5 million at December 31, 2024 from $272.9 million at December 31, 2023.
This compares to a decrease in cash and cash equivalents of $81.3 million to $262.5 million at December 31, 2022 from $343.9 million at December 31, 2021. 72 The following table summarizes our sources and uses of cash over the periods presented (in thousands): Fiscal Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Net cash provided by operating activities $ 407,699 $ 237,526 $ 205,574 Net cash used in investing activities (375,970 ) (417,468 ) (240,907 ) Net cash (used in) provided by financing activities (21,871 ) 100,368 (106,503 ) Effect of exchange rate changes 546 (1,770 ) (1,496 ) Net increase (decrease) in cash and cash equivalents $ 10,404 $ (81,344 ) $ (143,332 ) Operating Activities Net cash provided by operating activities consists primarily of net income adjusted for noncash items, such as: equity in (losses) earnings of unconsolidated joint ventures, contributions of treasury stock, depreciation and amortization of property and equipment and intangible assets, provisions for doubtful accounts, amortization of deferred gains, and impairment charges.
The following table summarizes our sources and uses of cash over the periods presented (in thousands): Fiscal Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Net cash provided by operating activities $ 523,606 $ 407,699 $ 237,526 Net cash used in investing activities (556,715 ) (375,970 ) (417,468 ) Net cash (used in) provided by financing activities 218,749 (21,871 ) 100,368 Effect of exchange rate changes (5,035 ) 546 (1,770 ) Net increase (decrease) in cash and cash equivalents $ 180,605 $ 10,404 $ (81,344 ) Operating Activities Net cash provided by operating activities consists primarily of net income adjusted for noncash items, such as: equity in (losses) earnings of unconsolidated joint ventures, contributions of treasury stock, depreciation and amortization of property and equipment and intangible assets, provisions for doubtful accounts, amortization of deferred gains, and impairment charges.
Change orders, which are a normal and recurring part of our business, are generally not distinct and are accounted for as part of the existing contract. The effect of a change order that is not distinct on the transaction price and our measure of progress for the performance obligation to which it relates is recognized on a cumulative catch-up basis.
The effect of a change order that is not distinct on the transaction price and our measure of progress for the performance obligation to which it relates is 76 recognized on a cumulative catch-up basis.
Engineers, LLC, a privately-owned company, for $12.2 million, subject to certain adjustments. Headquartered in Texas, I.S. Engineers, LLC provides full-service consulting specializing in transportation engineering, including roads and highways, and program management. The financial results of I.S. Engineers have been included in our consolidated results of operations from October 31, 2023 onward. Sealing Technologies, Inc.
Engineers, LLC provides full-service consulting specializing in transportation engineering, including roads and highways, and program management. The financial results of I.S. Engineers have been included in our consolidated results of operations from October 31, 2023 onward. 61 Sealing Technologies, Inc.
Selling, general and administrative expenses Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Selling, general and administrative expenses $ 869,905 $ 777,403 $ 92,502 11.9 % SG&A expenses for the year ended December 31, 2023 increased by $92.5 million compared to the prior year.
Selling, general and administrative expenses Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Selling, general and administrative expenses $ 869,905 $ 777,403 $ 92,502 11.9 % As a percentage of revenue, SG&A decreased by 2.5% to 16.0% for the year ended December 31, 2023 compared to 18.5% for the corresponding period last year.
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 our common stock based on quoted prices of a share of our common stock on the NYSE.
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, whichever occurs first. 80 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 our common stock based on quoted prices of a share of our common stock on the NYSE.
In contrast, we may be limited to bill certain fixed-price contracts only when specified milestones, including deliveries, are achieved. A number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work. Billed accounts receivable represents amounts billed to clients that have not been collected.
A number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work. Billed accounts receivable represents amounts billed to clients that have not been collected.
Fiscal Year Ended December 31, 2022 December 31, 2021 Revenues 100.0 % 100.0 % Direct costs of contracts 77.4 % 76.7 % Equity in earnings of unconsolidated joint ventures 0.4 % 1.0 % Selling, general and administrative expenses 18.5 % 20.7 % Operating income 4.4 % 3.6 % Interest income 0.0 % 0.0 % Interest expense (0.6 )% (0.5 )% Other income, net 0.1 % (0.1 )% Total other income benefit (expense) (0.5 )% (0.5 )% Income before income tax expense 4.0 % 3.1 % Income tax expense (0.9 )% (0.6 )% Net income including noncontrolling interests 3.0 % 2.4 % Net income attributable to noncontrolling interests (0.7 )% (0.7 )% Net income attributable to Parsons Corporation 2.3 % 1.8 % Revenue Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2022 December 31, 2021 Dollar Percent Revenue $ 4,195,272 $ 3,660,771 $ 534,501 14.6 % Revenue for the year ended December 31, 2022 compared to the prior year increased $534.5 million.
Fiscal Year Ended December 31, 2024 December 31, 2023 Revenues 100.0 % 100.0 % Direct costs of contracts 79.2 % 77.8 % Equity in (losses) earnings of unconsolidated joint ventures (0.3 )% (0.9 )% Selling, general and administrative expenses 14.1 % 16.0 % Operating income 6.3 % 5.3 % Interest income 0.2 % 0.0 % Interest expense (0.8 )% (0.6 )% Convertible debt repurchase loss (0.3 )% (— )% Other income, net (0.0 )% 0.1 % Total other income benefit (expense) (0.9 )% (0.4 )% Income before income tax expense 5.4 % 4.9 % Income tax expense (1.1 )% (1.0 )% Net income including noncontrolling interests 4.3 % 3.8 % Net income attributable to noncontrolling interests (0.8 )% (0.9 )% Net income attributable to Parsons Corporation 3.5 % 3.0 % Revenue Fiscal Year Ended Variance (U.S. dollars in thousands) December 31, 2024 December 31, 2023 Dollar Percent Revenue $ 6,750,576 $ 5,442,749 $ 1,307,827 24.0 % Revenue for the year ended December 31, 2024 compared to the prior year increased $1.3 billion.
Over time, we have experienced a relatively stable contract mix. 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.
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.
Adjusted EBITDA attributable to Parsons Corporation is Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests. 69 The following table shows Adjusted EBITDA attributable to Parsons Corporation for each of our reportable segments and Adjusted EBITDA attributable to noncontrolling interests: Fiscal Year Ended (U.S. dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Federal Solutions Adjusted EBITDA attributable to Parsons Corporation $ 289,250 $ 199,004 $ 162,733 Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation 127,785 123,385 121,700 Adjusted EBITDA attributable to noncontrolling interests 47,638 30,393 25,287 Total Adjusted EBITDA $ 464,673 $ 352,782 $ 309,720 Year ended December 31, 2023 compared to year ended December 31, 2022 Federal Solutions The Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 3,020,701 $ 2,212,987 $ 807,714 36.5 % Adjusted EBITDA attributable to Parsons Corporation $ 289,250 $ 199,004 $ 90,246 45.3 % The increase in Federal Solutions revenue for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to organic growth of 25% and increases from business acquisitions of $264.1 million.
Year ended December 31, 2023 compared to year ended December 31, 2022 Federal Solutions The Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 3,020,701 $ 2,212,987 $ 807,714 36.5 % Adjusted EBITDA attributable to Parsons Corporation $ 289,250 $ 199,004 $ 90,246 45.3 % The increase in Federal Solutions revenue for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to organic growth of 25% and increases from business acquisitions of $264.1 million.
(3) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue in the applicable period. 68 December 31, 2023 December 31, 2022 December 31, 2021 Net income attributable to Parsons Corporation $ 161,149 $ 96,664 $ 64,072 Interest expense, net 29,306 22,219 17,301 Income tax expense (benefit) 56,138 39,657 23,636 Depreciation and amortization 119,973 120,501 144,209 Net income attributable to noncontrolling interests 46,766 29,901 24,880 Equity-based compensation 36,151 24,354 19,601 Transaction-related costs (a) 12,013 16,270 11,965 Restructuring (b) 1,244 213 736 Other (c) 1,933 3,003 3,320 Adjusted EBITDA $ 464,673 $ 352,782 $ 309,720 (a) Reflects costs incurred in connection with acquisitions, and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
December 31, 2024 December 31, 2023 December 31, 2022 Net income attributable to Parsons Corporation $ 235,053 $ 161,149 $ 96,664 Interest expense, net 40,154 29,306 22,219 Income tax expense (benefit) 76,986 56,138 39,657 Depreciation and amortization 99,251 119,973 120,501 Net income attributable to noncontrolling interests 55,612 46,766 29,901 Equity-based compensation 61,492 36,151 24,354 Transaction-related costs (a) 17,138 12,013 16,270 Convertible debt repurchase loss 18,355 - - Restructuring (b) - 1,244 213 Other (c) 912 1,933 3,003 Adjusted EBITDA $ 604,953 $ 464,673 $ 352,782 (a) Reflects costs incurred in connection with acquisitions, and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
The decrease was primarily related to write-downs on joint ventures of $83.4 million. $57.9 million of the joint venture write-downs related to Parsons’ participation in a design build joint venture. The write-down relates to supply chain challenges identified during the procurement of materials which impacted the estimate to complete the project.
The decrease was primarily related to write-downs on joint ventures of $83.4 million. $57.9 million of the joint venture write-downs related to Parsons’ participation in a design build joint venture.
Critical Infrastructure The Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 2,422,048 $ 1,982,285 $ 439,763 22.2 % Adjusted EBITDA attributable to Parsons Corporation $ 127,785 $ 123,385 $ 4,400 3.6 % The increase in Critical Infrastructure revenue for the year ended December 31, 2023 compared to the corresponding period last year was substantially due to organic growth.
These increases were offset by higher selling general and administrative costs from business acquisitions, business development and sales activities, and incentive compensation costs as a result of the company's strong operating performance and growing employee base. 72 Critical Infrastructure The Year Ended Variance (U.S. dollars in thousands) December 31, 2023 December 31, 2022 Dollar Percent Revenue $ 2,422,048 $ 1,982,285 $ 439,763 22.2 % Adjusted EBITDA attributable to Parsons Corporation $ 127,785 $ 123,385 $ 4,400 3.6 % The increase in Critical Infrastructure revenue for the year ended December 31, 2023 compared to the corresponding period last year was substantially due to organic growth.
Investing Activities Net cash used in investing activities consists primarily of cash flows associated with capital expenditures and business acquisitions. Net cash used in investing activities decreased $41.5 million to $376.0 million during 2023 compared to $417.5 million during 2022.
Net cash used in investing activities decreased $41.5 million to $376.0 million during 2023 compared to $417.5 million during 2022.
Results of Operations Revenue Our revenue consists of both services provided by our employees and pass-through fees from subcontractors and other direct costs. Our Federal Solutions segment derives revenue primarily from the U.S. federal government and our Critical Infrastructure segment derives revenue primarily from government and commercial customers.
Results of Operations Revenue Our revenue consists of both services provided by our employees and pass-through fees from subcontractors and other direct costs.
The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2022 primarily relates to state income taxes and a recorded valuation allowance on foreign tax credit carryovers, offset in part by benefits related to income attributable to noncontrolling interest, earnings in lower tax jurisdictions and federal research tax credits.
The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2024 primarily relates to state income taxes, valuation allowance and executive compensations subject to Section 162(m) offset by benefits related to untaxed income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and equity-based compensation.
Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-plus, time-and-materials, or fixed-price. We generally bill and collect cash more frequently under cost-plus and time-and-materials contracts, as we are authorized to bill as the costs are incurred or work is performed.
We generally do not begin work on contracts until funding is appropriated by the customers. Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-plus, time-and-materials, or fixed-price.
Joint Ventures 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 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 earnings (losses) of unconsolidated joint ventures.
The changes in the Company's various working capital accounts were driven primarily by the significant increase in business volume during the year ended December 31, 2023 compared to the corresponding period last year. Net cash provided by operating activities increased $32.0 million to $237.5 million during 2022 compared to $205.6 million during 2021.
The changes in the Company's various working capital accounts were driven primarily by the significant increase in business volume during the year ended December 31, 2023 compared to the corresponding period last year. 74 Investing Activities Net cash used in investing activities consists primarily of cash flows associated with capital expenditures and business acquisitions.
Consolidation of Joint Ventures and Variable Interest Entities We participate in joint ventures, which include partnerships and partially owned limited liability corporations, to bid, negotiate and complete specific projects. We are required to consolidate these joint ventures if we hold the majority voting interest or if we meet the criteria under the consolidation model as described below.
We are required to consolidate these joint ventures if we hold the majority voting interest or if we meet the criteria under the consolidation model as described below.
Our ability to effectively deliver on project engagements and successfully assist our customers affects our ability to win new contracts and drives our financial performance. Acquired Operations I.S. Engineers, LLC On October 31, 2023, the Company entered into a Membership Interest Purchase Agreement to acquire a 100% ownership interest in I.S.
Our ability to effectively deliver on project engagements and successfully assist our customers affects our ability to win new contracts and drives our financial performance. Acquired Operations BCC Engin eering, LLC On November 1, 2024, the Company acquired a 100% ownership interest in BCC Engineering, LLC ("BCC") a privately owned company, for $232.7 million.
In 2023, 2022 and 2021, we made annual contributions to the ESOP in the amount of 8% of the participants’ cash compensation for the applicable year.
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. In 2024, 2023 and 2022, we made annual contributions to the ESOP in the amount of 8% of the participants’ cash compensation for the applicable year.
Year ended December 31, 2022 compared to year ended December 31, 2021 The following table sets forth our results of operations for fiscal 2022 and fiscal 2021 as a percentage of revenue.
We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries. 67 Year ended December 31, 2023 compared to year ended December 31, 2022 The following table sets forth our results of operations for fiscal 2023 and fiscal 2022 as a percentage of revenue.
The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2022 compared to the corresponding period last year was primarily due to increases in business volume, partially offset by reduced equity in earnings of $21.9 million and increased SG&A.
The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2024 compared to the corresponding period last year was primarily due to the increase in organic revenue.
The increase in net cash provided by operating activities is primarily due to a $40.4 million change in net income after adjusting for non-cash items and a change in the use of cash related to other long-term liabilities of $50.1 million.
The increase in net cash provided by operating activities is primarily due to a $98.4 million change in net income after adjusting for non-cash items and convertible debt settlement and from changes in our working capital accounts of $46.4 million (primarily from contract assets and prepaid expenses and other assets offset by accounts payable, accrued expenses and other current liabilities, and contract liabilities).
We enter into the following types of contracts with our customers: • Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness, safety and cost-effectiveness.
Our Federal Solutions segment derives revenue primarily from the U.S. federal government and our Critical Infrastructure segment derives revenue primarily from government and commercial customers. 62 We enter into the following types of contracts with our customers: • Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs incurred, plus a fee.

… 78 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed3 unchanged
Biggest changeThe 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. The interest rate at December 31, 2023 and December 31, 2022 was 6.6% and 5.6%, respectively.
Biggest changeThe 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. The interest rate at December 31, 2024 and December 31, 2023 was 5.6% and 6.6%, respectively.
Borrowings under the Revolving Credit Facility effective June 2021 bear interest 80 at either an adjusted 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%, both based on the leverage ratio of the Company at the end of each quarter.
Borrowings under the Revolving Credit Facility effective June 2021 bear interest at either an adjusted 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%, both based on the leverage ratio of the Company at the end of each quarter.
Item 7A. Qualitative and Quantita tive Disclosure About Market Risk Interest Rate Risk We are exposed to interest rate risks related to the Company’s Revolving Credit Facility and Delayed Draw Term Loan. As of December 31, 2023 and December 31, 2022, there were no amounts outstanding under the Revolving Credit Facility.
Item 7A. Qualitative and Quantita tive Disclosure About Market Risk Interest Rate Risk We are exposed to interest rate risks related to the Company’s Revolving Credit Facility and Delayed Draw Term Loan. As of December 31, 2024 and December 31, 2023, there were no amounts outstanding under the Revolving Credit Facility.
As of December 31, 2023, there was $350.0 million outstanding under the 2022 Delayed Draw Term Loan.
As of December 31, 2024, there was $350.0 million outstanding under the 2022 Delayed Draw Term Loan.

Other PSN 10-K year-over-year comparisons