Investor Day 2023
NYSE | March 15, 2023
Investor Day 2023
NYSE | March 15, 2023
Presentations
Forward Looking Statements
The statements made during Investor Day and the material included therewith contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements arebased on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: the impact of COVID-19; any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in material adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors including under the caption “Risk Factors” in our Annual Report with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2022, on Form 10-K, filed on February 17, 2023, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statements made during Investor Day that becomes untrue because of subsequent events, new information of otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.
Non-GAAP Financial Information
This presentation includes certain non-GAAP financial measures, such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Free Cash Flow, Free Cash Flow Conversion, Net Debt and Net Debt Leverage. These are not measures of financial performance under generally accepted accounting principles in the U.S. ("GAAP") and, accordingly, these measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Management believes that these non-GAAP measures provide another measure of the Company's results of operations and financial condition, including its ability to comply with financial covenants. These non-GAAP measures are frequently used by financial analysts covering Parsons Corporation and its peers. The Company’s computation of its non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability.
Adjusted EBITDA is computed by adjusting net income or loss attributable to Parsons Corporation for the following:
- Exclude interest expense (net of interest income).
- Exclude provision for income taxes.
- Exclude depreciation and amortization.
- Include net income or loss attributable to noncontrolling interests.
- Exclude equity-based compensation.
- Exclude transaction-related costs.
- Exclude restructuring costs.
- Exclude other non-operational income or expense to include asset impairment charges, significant non-recurring litigation-related expenses, deferred gains related to sale-leaseback transactions, gain or loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature.
Adjusted EBITDA margin is computed by dividing Adjusted EBITDA by Revenue.
Free Cash Flow (“FCF”) is computed by subtracting capital expenditures from Cash Flow from operating activities.
Adjusted Net Income is computed by adjusting net income or loss attributable to Parsons Corporation for the following:
- Exclude deferred tax asset recognition as a result of the company converting from an S-Corporation to a C-Corporation.
- Exclude acquisition related intangible asset amortization.
- Exclude equity-based compensation.
- Exclude transaction-related costs.
- Exclude restructuring costs.
- Exclude other non-operational income or expense to include asset impairment charges, significant non-recurring litigation-related expenses, deferred gains related to sale-leaseback transactions, gain or loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature.
Free Cash Flow (“FCF”) Conversion is computed by dividing Free Cash Flow by Adjusted Net Income.
Net Debt is computed by subtracting cash and cash equivalents from total debt, excluding lease liabilities.
Net Debt Leverage is computed by dividing Net Debt by trailing twelve months Adjusted EBITDA as of the balance sheet date.