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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K 
    (Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20192022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number: 000-50976
HURON CONSULTING GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware01-0666114
(State or other jurisdiction of

incorporation or organization)
(IRS Employer

Identification Number)
550 West Van Buren Street
Chicago,, Illinois
60607
(Address of principal executive offices and zip code)
(312)583-8700
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareHURNNASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  x    No  o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o    No  x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated Filer☐Non-accelerated Filer☐
Smaller Reporting 

Company
☐Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ☐    No  x
The aggregate market value of the registrant’s common stock held by non-affiliates as of June 30, 20192022 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $1,128,100,000.$1,323,000,000.
As of February 18, 2020, 22,509,23521, 2023, 19,331,520 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.
Documents Incorporated By Reference
Portions of the registrant’s definitive Proxy Statement to be filed with Securities and Exchange Commission within 120 days after the end of its fiscal year are incorporated by reference into Part III.


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HURON CONSULTING GROUP INC.
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2019
2022
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FORWARD-LOOKING STATEMENTS
In this Annual Report on Form 10-K, unless the context otherwise requires, the terms “Huron,” “Company,” “we,” “us” and “our” refer to Huron Consulting Group Inc. and its subsidiaries.
Statements in this Annual Report on Form 10-K that are not historical in nature, including those concerning the Company’s current expectations about its future requirements and needs,results, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “may,” “should,” “expects,” “provides,” “anticipates,” “assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,” “seeks,” “would,” “believes,” “estimates,” “plans,” “continues,” “goals,” “guidance,” or “outlook,” or similar expressions. These forward-looking statements reflect our current expectations about our future requirements and needs, results, levels of activity, performance, or achievements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: failure to achieve expected utilization rates, billing rates, and the necessary number of revenue-generating professionals; inability to expand or adjust our service offerings in response to market demands; our dependence on renewal of client-based services; dependence on new business and retention of current clients and qualified personnel; failure to maintain third-party provider relationships and strategic alliances; inability to license technology to and from third parties; the impairment of goodwill; various factors related to income and other taxes; difficulties in successfully integrating the businesses we acquire and achieving expected benefits from such acquisitions; risks relating to privacy, information security, and related laws and standards; and a general downturn in market conditions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including, among others, those described under Item 1A. "Risk“Risk Factors,"” that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. We disclaim any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.
PART I 
ITEM 1.BUSINESS.
OVERVIEW
Huron is a global consultancyprofessional services firm that collaboratespartners with clients to drive strategicdevelop growth ignite innovationstrategies, optimize operations and navigate constant change. Through a combinationaccelerate digital transformation using an enterprise portfolio of strategy, expertisetechnology, data and creativity, we helpanalytics solutions to empower clients accelerate operational, digital and cultural transformation, enabling the change they need to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
We are headquartered in Chicago, Illinois, with additional locations in the United States and abroad in Canada, India, Singapore, Switzerland, and the United Kingdom.Switzerland.
OUR SERVICES
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. The new operating model strengthens Huron’s go-to-market strategy, drives efficiencies that support margin expansion, and positions the company to accelerate growth.
To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. These changes improve visibility into the core drivers of our business. While our consolidated results have not been impacted, our historical segment information has been recast for consistent presentation. See below for additional information on our principal capabilities and operating industries.
For information on our segment results, see Part II - Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 19 "Segment Information" within the notes to our consolidated financial statements.
Capabilities
Within each of our reportable segments, we provide services under two principal capabilities: i) Consulting and Managed Services and ii) Digital.
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•Consulting and Managed Services
Our Consulting and Managed Services capabilities represent our management consulting services, managed services (excluding technology-related managed services) and outsourcing services delivered across industries. Our Consulting and Managed Services experts help our clients address a variety of strategic, operational, financial, people and organizational-related challenges. These services are often combined with technology, analytic and data-driven solutions powered by our Digital capability to support long-term relationships with our clients and drive lasting impact. Examples include the areas of revenue cycle management and research administration at our healthcare and education clients, where our consulting and managed services projects are often coupled with our digital services and product offerings.
•Digital
Our Digital capabilities represent our technology and analytics services, including technology-related managed services and software products delivered across industries. Our Digital experts help clients address a variety of business challenges, including, but not limited to, designing and implementing technologies to accelerate transformation, facilitate data-driven decision making and improve customer and employee experiences.
We have expanded our ecosystem to work with more than 25 technology partners. We are a Leading Modern Oracle Network Partner; a Summit-level consulting partner with Salesforce.com and a Premium Partner with Salesforce.org; a Workday Services, Preferred Channel, Extend, and Application Management Services Partner; an Amazon Web Services consulting partner; an Informatica Platinum Partner; an SAP Concur implementation partner; and a Boomi Elite Partner.
We have also grown our proprietary software product portfolio to address our clients' challenges with solutions that expand our base of recurring revenue and further differentiate our consulting, digital and managed services offerings. Our product portfolio bundles our deep industry expertise and unique intellectual property together to serve our clients outside of our traditional consulting offerings. Our product portfolio includes, among others: Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance; Huron Intelligence™ Rounding, the #1 ranked Digital Rounding solution in the 2023 Best in KLAS® report; and Huron Intelligence™ Analytic Suite in Healthcare, a predictive analytics suite to improve care delivery while lowering costs.
Operating Industries
We provide professionalour services throughand manage our business under three operating industries, which are our operating segments: Healthcare, Business Advisory,Education and Education.Commercial. For the year ended December 31, 2019,2022, we derived 46%47%, 29%32%, and 25%21% of our consolidated revenues from the Healthcare, Business Advisory,Education and EducationCommercial operating segments, respectively.
•Healthcare
Our Healthcare segment hasserves acute care providers, including national and regional health systems; academic health systems; community health systems; and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our Healthcare professionals have a depth of expertise in business operations, including financial and operational improvement, care transformation, culture and revenue cycle managed services; digital solutions, spanning technology and analytic-related services and a portfolio of software products; organizational excellence,transformation; financial advisory and strategy and technologyinnovation. Healthcare organizations are focused on establishing a sustainable long-term strategy and analytics. We serve nationalbusiness model centered around growth, optimal cost structures, reimbursement models, financial strategies, and regional hospitals, integrated health systems, academic medical centers, community hospitals,consumer-focused digital transformation; changing the way care is delivered, particularly in light of personnel shortages, and medical groups.improving access to care; and evolving their digital capabilities to more effectively manage their business. Our solutions help clients evolve and adapt to thethis rapidly changing healthcare environment to become a more agile, efficient and achieveconsumer-centric organization. We use our deep industry, functional and technical expertise to help clients solve a diverse set of business issues, including, but not limited to, identifying new opportunities for growth, optimizeoptimizing financial and operational performance, enhance profitability, improve qualityimproving care delivery and clinical outcomes, align leaders, improve organizational culture, and driveincreasing physician, patient and employee engagement across the enterprise to deliver better consumer outcomes.satisfaction, and maximizing return on technology investments.
We help organizations transform and innovate their delivery model to focus on patient wellness by improving quality outcomes, minimizing care variation and fundamentally improving patient and population health. Our consultants collaborate with clients to help build and sustain today’s business to invest in the future by reducing complexity, improving operational efficiency and growing market share. We enable the healthcare of the future by identifying, integrating and optimizing digital and technology investments to collect data that transforms care delivery and improves patient outcomes. We also develop future leaders capable of driving meaningful cultural and organizational change and who transform the consumer experience.

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Business Advisory
Our Business Advisory segment provides services to large and middle market organizations, lending institutions, law firms, investment banks, private equity firms, and not-for-profit organizations, including higher education and healthcare institutions. We assist clients in a broad range of industries and across the spectrum from healthy, well-capitalized companies to organizations in transition, as well as creditors, equity owners, and other key constituents. Our Enterprise Solutions and Analytics experts advise, deliver, and optimize technology and analytic solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client or stakeholder experience. Our Business Advisory experts resolve complex business issues and enhance client enterprise value through a suite of services including capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory. Our Strategy and Innovation professionals collaborate with clients across a range of industries to identify new growth opportunities, build new ventures and capabilities, and accelerate organizational change. Our Life Sciences professionals provide strategic solutions to help pharmaceutical, medical device, and biotechnology companies deliver more value to patients, payers, and providers, and comply with regulations.•Education
Education
Our Education segment provides consultingserves public and private colleges and universities, research institutes and other education-related organizations. Our Education professionals have a depth of expertise in strategy and innovation; business operations, including the research enterprise and student and alumni lifecycle; digital solutions, spanning technology solutionsand analytic-related services and Huron Research Suite, the leading software suite designed to higher education institutionsfacilitate and academic medical centers.improve research administration service delivery and compliance; and organizational transformation. Our Education segment clients are increasingly faced with strategic, financial and/or enrollment challenges, increased competition, and a need to modernize their businesses using technology to advance their missions. We collaboratecombine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with clients to address challenges relating to businesstechnology and technology strategy,analytics; strengthening research strategies and support services; evolving their organizational strategy; optimizing financial and operational excellence,performance; applying innovative enrollment strategies; and enhancing the student success, research administration,lifecycle.
•Commercial
Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory compliance.change by helping them adapt to rapidly changing environments and accelerate business transformation. Our research enterprise solutions assist clientsCommercial professionals work primarily with six primary buyers: the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, and organizational advisors, including lenders and law firms. We have a deep focus on serving organizations in identifyingthe financial services, energy and implementing institutional researchutilities, industrials and manufacturing industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and nonprofit. Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, strategy optimizing clinical research operations, improving financial management and cost reimbursement, improving service to faculty, and mitigating risk compliance. Our technology strategy, enterprise applications, and analytic solutions transform and optimize operations, deliver time and cost savings, and enhance the student experience. Our institutional strategy, budgetinginnovation, and financial management,advisory (special situation advisory and corporate finance advisory) services. In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage. Our experts help organizations across industries with a variety of business operations align missions with business priorities, improve quality,challenges, including, but not limited to, embedding technology and reduce costs institution-wide. Our student solutions improve attraction, retentionanalytics throughout their internal and graduation rates, increase student satisfactioncustomer-facing operations; developing analytics and help generate quality outcomes.insights to identify the needs of tomorrow’s customers, evolve their strategies, and bring new products to market; managing through stressed and distressed situations to create a viable path forward for stakeholders; and providing financial, risk and regulatory advisory offerings.
Huron is a Platinum level member of the Oracle PartnerNetwork (OPN), an Oracle Cloud Premier Partner within North America, a Gold level consulting partner with Salesforce.com and a Workday Services Partner.
OUR CLIENTS AND INDUSTRIES
We provide professional services to both financially sound organizations and organizations in transition including: national and regional hospitals, integrated health systems, higher education institutions and academic medical centers, community hospitals, medical groups, large and middle market organizations, not-for-profit organizations, lending institutions, law firms, investment banks and private equity firms. In 2019, we served over 1,800 clients.
Our clients are in a broad array ofacross industries, including healthcare, education, financial services, life sciences, energy and utilities, industrials and manufacturing, and industrials, governmentpublic sector and other commercial industries. Our clients span hospitals, health systems and academic medical centers; colleges, universities and research institutes; banks, asset managers, insurance companies and private equity firms; oil and gas and utilities companies; manufacturing organizations; and the federal government. In 2022, we served over 2,000 clients, and our 10 largest clients accounted for approximately 17% of our consolidated revenues.
EMPLOYEESHUMAN CAPITAL RESOURCES AND MANAGEMENT
Our success depends on our ability to attract, engage, develop and retain highly talented professionals. We know that byOur growth strategy depends on creating a work environment where employees can shape their futures,are engaged and individuals are rewarded not only for their own contributions but also forand the success of our organization, we can accomplish these goals.organization. We are focused on advancing every facet of the employee experience, beginning with the recruiting process through post-employment or retirement. We create a personalized experience for our people where they are empoweredand empower them to make a meaningful impact on our clients, our communities, and with one another. We have developed comprehensive programs incorporating learning opportunities, beginning with the onboarding process and continuing throughout one’s career journey.to enable the professional development of our team. We provide a competitive total rewards package including robust benefits that are tailored to the diverse needs of our employees and are refreshed regularly to maintain competitiveness. Our commitmenttotal rewards program has continuously helped Huron be recognized as a Best Firm to corporate social responsibilityWork For by Consulting magazine, including 2022 which marks our twelfth consecutive year earning this distinction. In addition to external recognitions, we monitor human capital-related internal metrics. Our leading measure is facilitated throughour quarterly employee engagement score, which was 80% for 2022 and continued to be above the Glint Employee Engagement global benchmark of 76%. In addition, we regularly review voluntary turnover across a number of key variables including business unit, individual performance, geography, and demographics in order to assess the effectiveness of our employee development and community experience team and encompasses our Helping Hands program, diversity and inclusion efforts, and a renewed focus on sustainability.total rewards programs.
Our employee population is divided into two groups: client-serving and support professionals. As of December 31, 2019,2022, we had 3,750approximately 5,660 full-time employees,client service and support professionals, including 153193 client-serving managing directors.directors and principals. Our client-serving employees serveact as critical business advisors;advisors, collaborating with clients to help solve their most complex business problems. Our managing directors are the key drivers of growth in our business, generating new revenue streams from new and existing clients. Our managing directors and new clients. Theyprincipals also enhance our market reputation by partneringworking closely with our clients as advisorsto address their most pressing challenges and engagement team leaders.ensuring high-quality delivery of our engagements. Internally, they createlead the creation of our intellectual capital, develop our people, and are stewards of our culture. Our principals, senior directors, directors, and managers manage day-to-day client relationships and engagement teams, develop our people, nurture our culture, and oversee the delivery and quality of our
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work product. Our associates and analysts gather and organize data, conduct detailed analyses, evolve our culture and prepare presentations that synthesize and distill information to support recommendations we deliver to clients.
Our support professionals include our senior management team, as well as those who provide sales support, methodology creation, software development, andour corporate functions

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consisting of ourcorporate development, facilities, finance and accounting, human resources, information technology, legal, and marketing teams.marketing) and those who provide sales support, methodology creation, and software development. These employeesprofessionals provide strategic direction for the enterprise and support that enables the success of our businesses and client-serving employees. At December 31, 2019,2022, our support professionals team was led by 2430 executives, managing directors, executives and corporate vice presidents.
In addition to our full-time client-serving employees, we engage temporary employees on an as-needed basisbasis. We primarily use this contingent workforce to provide unique skill sets that are not requiredengage talent with specialized skills and/or experience or to expand our capacity to be staffedable to deliver on client engagements or internal initiatives. We will continue to use temporary employees going forward as a full-time basis.key part of achieving our growth strategy.
The ability to advance one’s career is critical to our employee retention and engagement. As part of our onboarding process, our employee experience team facilitates a robust and structured curriculum for newly hired employees to developemployees. Guided by our values and onboard into the company. WeHuron Leadership Principles, we strive to develop world class leaders and are committed to providing programs and opportunities that achieve this goal by focusing on key leadership attributesbehaviors at all levels. We also provide a variety of learning opportunities, through onlineboth individual on-demand courses and virtual classroom environments, to further develop employees’ capabilities,skills, including technical knowledge; people skills;knowledge, soft skills, team dynamics;dynamics, and coaching and developing others. We encourage our employees to enhance their professional skillscapabilities through external learning opportunities that certify their technical skills and to pursue certain advanced degrees. Employees are matched with internal onboarding stewards, performance coaches, mentors, and, mentorsin some cases, sponsors to facilitate their growth including identifying opportunities for professional development, formal training, and technical skill certifications. All employees have a coach to support them.network of support.
Our total rewards philosophy focuses on rewarding and retaining our high performing employees. To accomplish this, we offer employees a competitive base salary;salary, performance incentives;incentives, and robust, market-competitive benefits.
Our incentive compensation plan is designed to recognize and reward performance ofat both the organization and individuals and to ensure we retain our top performers.individual level. We take both practicebusiness unit and total company financial performance into consideration in the determination of bonus pool funding. At the practicebusiness unit level, the annual bonus pool is funded based on achievement of its business unit and enterprise-wide annual financial goals. Our board of directors reviews and approves the total incentive compensation pool for all practicesbusiness units in the context of the Company’sHuron’s overall financial performance. Individual bonus awards are based on the practice’s financial performance,business unit’s bonus pool funding, individual bonus targets, and the individual’s performance as evaluated through our performance management process. The intent of the incentive compensation plan is to differentiate rewards based on individual performance, ensuring that our top performers for the year receive incentives that are commensurate with their contributions which enables Huron to retain them and continue to provide our clients with exceptional service.in a given year. The incentive compensation plan for our named executive officers is funded based on a blend of achievement of company-wide financial goals and strategic initiatives.
Managing directors’ individual compensation levels, including base salary and target incentive awards, are set to align with the value of their expected contributions to the organization,Huron, including collaboration across practices.our industry and capability teams. As the key drivers of the organization’s success, their compensation is designed to include equity awards as a core component. The use of equity is intended to encourage retention, align the interests of our managing directors with shareholders, and help build wealth over a managing director's career at Huron through annual grants as well as stock price appreciation.
Our benefit programs are designed to be comprehensive, competitive and personalized to the needs of our employees. Examples of these programs include flexible paid time off and a travel reward program which recognizes the significant travel commitment of our client-serving workforce. We provide opportunities that allow employees to focus and care for their personal well-being which are aimed at providing tools and resources to focus on their physical, financial, social, and emotional health given the demanding nature of their work. In addition, our health and welfare plans, retirement benefits, and stock purchase plan provide a core foundation of security to our employees and their families.
Our corporate social responsibility effortsDiversity, Equity and Inclusion
Huron’s value of inclusion has been embedded across our organization since our founding and is fostered in our work environment every day. In 2020, we renewed our commitment to holding ourselves accountable by developing a five-year diversity, equity and inclusion action plan to help build a more equitable society. Through our action plan in 2022, we continued to foster an inclusive culture, advanced diverse representation across all levels of the organization, expanded our community outreach and support, and performed a new pay equity study. Additionally, in 2022, the strategic measures included in the annual incentive program for our named executive officers continued to include quantitative and qualitative measures against the progress on the goals outlined in our five-year action plan. We will continue to execute and expand on our diversity, equity and inclusion action plan in 2023 and beyond.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MANAGEMENT
We are designedfully committed to our expanded societal role in making a lasting, positive impact on our people, our clients, our communities and the environment. In 2022, we published our third Environmental, Social and Governance ("ESG") report, highlighting the actions we have taken to support an individual’s charitable interests while also providing a venueour clients, our communities, our people and the environment. Our ESG report reflects our efforts in support of the United Nations
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Sustainable Development Goals ("SDGs"), particularly five goals that are integrally aligned with our values-driven culture and the work we do for our employeesclients: good health and well-being, quality education, gender equality, decent work and economic growth and climate action. We have and will continue to come together to make an impact in the communities in which we live and work. In addition, the diversity and inclusion efforts support the needs ofthese goals through our growing employee population throughHuron Helping Hands program, employee resource groups, that provide corporate-wide educational opportunities, build awareness, celebratesustainability efforts, and corporate partnerships. As an addendum to our differences, develop mentoring relationships,2022 ESG report, we published a Sustainability Accounting Standards Board ("SASB") index in line with SASB’s Professional & Commercial Services standards. Our SASB index provides further quantitative and ensure we are fosteringqualitative information regarding our data security programs, practices and policies, workforce diversity and engagement metrics, and our approach to promoting professional integrity and ethical behavior among our workforce, commensurate with best practices for professional services organizations.
For additional information on Huron’s commitment to a welcomingmore sustainable future, refer to our annual ESG report, which includes our SASB index, and engaging environment for all employees.is available on the investor relations website which is located at ir.huronconsultinggroup.com.
BUSINESS DEVELOPMENT AND MARKETING
Our business development and marketing activities are aimed at cultivating relationships, generating leads, and building a strong brand reputation with health systems, hospitals, and university administrators; offices of the C-suite;C-suite and senior level influencers and decision makers of middle market and large corporate organizations.organizations within our core industries. We believe excellent service delivery to clients is critical to building and maintaining relationships and sustaining and strengthening our brand reputation, and we emphasize the importance of high-quality client service to all of our employees.

Currently, we generate new business opportunities through the combination of relationships our managing directors have with individuals working in healthcare organizations, academicat our prospective clients and research institutions, and corporations, and marketing lead generation activities. We also view market-based collaboration between our managing directorsemployees as a key component in building our business. Often, the client relationship of a managing directoran employee in one area of our business leads to opportunities in another area. All of our managing directors understand their roles in ongoing relationship and business development, which is reinforced through our compensation and incentive programs. We actively seek

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to identify new business opportunities and frequently receive referrals and repeat business from past and current clients. In addition, to complement the business development efforts of our managing directors, we have dedicated business development professionals who are focused exclusively on developing client relationships and generating new business.
COMPETITION
The professional services industry is extremely competitive, highly fragmented, and constantly evolving. The industry includes a large number of participants with a variety of skills and industry expertise, including other strategy, business operations, technology, and financial advisory consulting firms; general management consulting firms; the consulting practices of major accounting firms; technical and economic advisory firms; regional and specialty consulting firms; consulting divisions of our technology partners; and the internal professional resources of organizations. We compete with a large number of service and technology providers in all of our segments. Our competitors vary, depending on the particular practiceindustry and expertise area, and we expect to continue to face competition from new market entrants.
We believe the principal competitive factors in our market include reputation, the ability to attract and retain top talent, the capacity to manage engagements effectively to drive high value to clients, and the ability to deliver measurable and sustainable results. There is also competition on price, although to a lesser extent due to the criticality of the issues that many of our services address. Some competitors have a greater geographic footprint, broader international presence, and more resources than we do, but we believe our reputation and ability to deliver high-value, quality service and measurable results to our clients across a balanced portfolio of services and to attract and retain employees with broad capabilities and deep industry expertise enable us to compete favorably in the professional services marketplace.
AVAILABLE INFORMATION
We file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission (the “SEC”). These filings are available on the SEC’s website at http://www.sec.gov.
Our website is located at www.huronconsultinggroup.com, and our investor relations website is located at ir.huronconsultinggroup.com. We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 available through our website, free of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We provide information about our business and financial performance, including our corporate profile, on the Investor Relations page of our website. Additionally, we webcast our earnings calls and certain events we participate in with members of the investment community on the Investor Relations page of our website. Further corporate governance information, including our code of ethics, code of business conduct, corporate governance guidelines, and board committee charters, is also available on the Investor Relations page of our website. The content of our websites is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
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ITEM 1A.RISK FACTORS.
The following discussion of risk factors may be important to understanding the statements in this Annual Report on Form 10-K or elsewhere. The following information should be read in conjunction with Part II—Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes in this Annual Report on Form 10-K. Discussions about the important operational risks that our business encounters can be found in Part II—Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Risks Related to Human Capital Resources
An inability to retain our senior management team and other managing directors would be detrimental to the success of our business.
We rely heavily on our senior management team, our practice leaders, and other managing directors; our ability to retain them is particularly important to our future success. Given the highly specialized nature of our services, the senior management team must have a thorough understanding of our service offerings as well as the skills and experience necessary to manage an organization consisting of a diverse group of professionals. In addition, we rely on our senior management team and other managing directors to generate revenues and market our business. Further, our senior management’s and other managing directors’ personal reputations and relationships with our clients are a critical element in obtaining and maintaining client engagements. Members of our senior management team and our other managing directors could choose to leave or join one of our competitors and some of our clients could choose to use the services of that competitor instead of our services. If one or more members of our senior management team or our other managing directors leave and we cannot replace them with a suitable candidate quickly, or if legal restrictions on non-competition agreements are put into place, we could experience difficulty in securing and successfully completing engagements and managing our business properly, which could harm our business prospects and results of operations.

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Our inabilityIf we are unable to hire and retain talented people in an industry where there is great competition for talent, it could have a serious negative effect on our prospects and results of operations.
Our business involves the delivery of professional services and is highly labor-intensive. Our success depends largely on our general ability to attract, develop, motivate, and retain highly skilled professionals. Further, we must successfully maintain the right mix of professionals with relevant experience and skill sets as we continue to grow, as we expand into new service offerings, and as the market evolves. The loss of a significant number of our professionals, the inability to attract, hire, develop, train, and retain additional skilled personnel, or failure to maintain the right mix of professionals could have a serious negative effect on us, including our ability to manage, staff, and successfully complete our existing engagements and obtain new engagements. Qualified professionals are in great demand, and we face significant competition for both senior and junior professionals with the requisite credentials and experience. Our principal competition for talent comes from other consulting firms and accounting firms, as well as from organizations seeking to staff their internal professional positions. Many of these competitors may be able to offer greater compensation and benefits or more attractive lifestyle choices, career paths, or geographic locations than we do.can offer. Therefore, we may not be successful in attracting and retaining the skilled consultants we require to conduct and expand our operations successfully. Increasing competition for these revenue-generating professionals may also significantly increase our labor costs, which could negatively affect our margins and results of operations.
Changes in capital markets, legalIf we are unable to manage the organizational challenges associated with our continued growth, we might be unable to achieve our business objectives.
As we continue to grow and evolve, it might become increasingly difficult to maintain effective standards across a large enterprise and effectively institutionalize our knowledge or regulatory requirements, and general economicto effectively change the strategy, operations or other factors beyond our control could reduce demand for our services, in which case our revenues and profitability could decline.
A number of factors outsideculture of our control affect demand forCompany in a timely manner. It might also become more difficult to maintain our services. These include:
fluctuations inculture; effectively manage and monitor our people and operations; effectively communicate our core values, policies and procedures, strategies and goals; and motivate, engage and retain our people, particularly given the distribution of our employees across the U.S. and global economies;
internationally, the U.S. or global financial marketsrate of new hires, the breadth of skills and expertise across all of our solutions, and the availability, costs,fact that essentially all of our employees have the option to work remotely. The size and termsscope of credit;
changes in lawsour operations increase the possibility that we will have employees who expose us to unacceptable business risks, despite our efforts to train them and regulations; and
other economic factors and general business conditions.
maintain internal controls to prevent such instances. For example, some portionemployee misconduct could involve the improper use of sensitive or confidential information entrusted to us, or obtained inappropriately, or the services we provide may be consideredfailure to comply with legislation or regulations regarding the protection of sensitive or confidential information, including personal data and proprietary information. Furthermore, the inappropriate use of social networking sites by our clientsemployees could result in breaches of confidentiality, unauthorized disclosure of non-public company information or damage to be more discretionary in nature, asour reputation. If we do not continue to develop and implement the demand for the services may be impacted by economic slowdowns.We are not ableright processes and tools to predict the positive or negative effects that future events or changes to the U.S. or global economy, financial markets, or regulatorymanage our enterprise and business environment could have oninstill our operations.
Our goodwillculture and other intangible assets represent a substantial amountcore values into all of our total assets,employees, our ability to compete successfully and achieve our business objectives could be impaired. In addition, we have recently made, and may be required to recognize a non-cash impairment charge for these assets if the performance of one or more of our reporting units falls below our expectations.
Our total assets reflect a substantial amount of intangible assets, primarily goodwill. At December 31, 2019, goodwill and other intangible assets totaled $678.3 million, or 61%, of our total assets. Goodwill results from our acquisitions, representing the excess of the fair value of consideration transferred over the fair value of the net assets acquired. We test goodwill for impairment at the reporting unit level, annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. Intangible assets other than goodwill represent purchased assets that lack physical substance but can be distinguished from goodwill. Our intangible assets primarily consist of customer relationships, trade names, customer contracts, technology and software, and non-competition agreements, all of which were acquired through business combinations. We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. No material impairment charges for intangible assets were recorded in 2019, 2018, and 2017. During the years ended 2019 and 2018, we did not record any non-cash goodwill impairment charges. During 2017, we recorded $253.1 million of non-cash goodwill impairment charges. Of the $253.1 million, $208.1 million related to our Healthcare reporting unit and $45.0 million related to our Enterprise Solutions and Analytics reporting unit which is included in our Business Advisory segment.
Determining the fair value of a reporting unit requires uscontinue to make, significant judgments, estimates, and assumptions. While we believe that the estimates and assumptions underlying our valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether or not a non-cash goodwill impairment charge is recognized and also the magnitude of any such charge. The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptionsoperating model, including how we are organized as the needs and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in additional non-cash goodwill impairment charges.
Refer to “Critical Accounting Policies” within Part I - Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 4 “Goodwill and Intangible Assets” within the notes to our consolidated financial statements for further discussionsize of our business combinations, goodwill, intangible assets,change, and impairment tests performed.

if we do not successfully implement the changes, our business and results of operation may be negatively impacted.
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Risks Related to Business Growth and Development
We may incur costs to support our business and the inability to effectively build a support structure for the business could have an adverse impact on our growth and profitability.
We have grown significantly since we commenced operations and have increased the number of our full-time professionals from 249 in 2002 to 3,750approximately 5,660 as of December 31, 2019.2022. Additionally, our considerable growth has placed demands on our management and our internal systems, procedures, and controls and will continue to do so in the near future. To successfully manage growth, we must periodically adjust and strengthen our operating, financial, accounting, and other systems, procedures, and controls, which may increase our total costs and may adversely affect our gross profitsoperating income and our ability to sustain profitability if we do not generate increased revenues to offset the costs. As a public company, our information and control systems must enable us to prepare accurate and timely financial information and other required disclosures. If we discover deficiencies in our existing information and control systems that impede our ability to satisfy our reporting requirements, we must successfully implement improvements to those systems in an efficient and timely manner.
In the fourth quarter of 2019, we committed to the implementation of a new enterprise resource planning (“ERP”) system designed to improve the efficiency of our internal operational, financial and administrative activities. The implementation of a new ERP system, which will take place over several years, subjects us to inherent costs and risks including substantial capital expenditures, additional administration and operating expenses, potential disruption of our internal control structure, retention of sufficiently skilled personnel to implement and operate the new system, demand on management time, and other risks and costs of delays or difficulties in transition. Our system implementation may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, the difficulties with implementing a new ERP system may cause disruptions or have an adverse effect on our business operations, if not anticipated and appropriately mitigated.
Our financial results could suffer if we are unable to achieve or maintain adequate utilization and suitable billing rates for our consultants, or if we are unable to deliver our services due to factors that disrupt travel to our client sites.
Our profitability depends to a large extent on the utilization and billing rates of our professionals. Utilization of our professionals is affected by a number of factors, including:
the number and size of client engagements;
the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable;
our ability to transition our consultants efficiently from completed engagements to new engagements;
the hiring of additional consultants because there is generally a transition period for new consultants that results in a temporary drop in our utilization rate;
unanticipated changes in the scope of client engagements;
our ability to forecast demand for our services and thereby maintain an appropriate level of consultants; and
conditions affecting the industries in which we practice as well as general economic conditions.
The billing rates of our consultants that we are able to charge are also affected by a number of factors, including:
our clients’ perception of our ability to add value through our services;
the market demand for the services we provide;
an increase in the number of engagements in the government sector, which are subject to federal contracting regulations;
introduction of new services by us or our competitors;
our competition and the pricing policies of our competitors; and
current economic conditions.
If we are unable to achieve and maintain adequate overall utilization as well as maintain or increase the billing rates for our consultants, our financial results could materially suffer. In addition, our consultants oftentimes perform services at the physical locations of our clients. If there are natural disasters, widespread outbreak of contagious disease, disruptions to travel and transportation, or problems with communications systems, our ability to perform services for, and interact with, our clients at their physical locations may be negatively impacted which could have an adverse effect on our business and results of operations.

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Expanding our service offerings or number of offices may add additional risks and may not be profitable.
We may choose to develop new service offerings, open new offices, or eliminate service offerings because of market opportunities or client demands. Developing new service offerings involves inherent risks, including:
our inability to estimate demand for the new service offerings;
competition from more established market participants;
exposure to new legal and operational risks;
a lack of market understanding;
unanticipated expenses to recruit and hire qualified consultants and to market our new service offerings; and
unanticipated challenges with service delivery.
For example, our recently launched Huron Managed Services business provides revenue cycle management services to hospitals and health systems. These services include the coding, preparation, submission and collection of claims for medical service to payers for reimbursement. Such claims are governed by U.S. federal and state laws. U.S. federal law provides civil liability to any persons that knowingly submit, or cause to be submitted, a claim to a payer, including Medicare, Medicaid and private health plans, seeking payment for any services or items that overbills or bills for services or items that have not been provided to the patient. U.S. federal law may also impose criminal penalties for intentionally submitting such false claims. In addition, federal and state law regulates the collection of debt and may impose monetary penalties for violating those regulations. In connection with these laws, we may be subjected to U.S. federal or state government investigations and possible penalties may be imposed upon us, false claims actions may have to be defended and private payers may file claims against us. Any investigation or proceeding related to these laws, even if unwarranted or without merit, may have a material adverse effect on our business, results of operations and financial condition.
In addition, expanding into new geographic areas and expanding current service offerings is challenging and may require integrating new employees into our culture as well as assessing the demand in the applicable market. If we cannot manage the risks associated with new service offerings or new locations effectively, we are unlikely to be successful in these efforts, which could harm our ability to sustain profitability and our business prospects.
Our quarterly results of operations have fluctuated in the past and may continue to fluctuate in the future as a result of certain factors, some of which may be outside of our control.
A key element of our strategy is to market our products and services directly to certain large organizations, such as health systems and acute care hospitals, and to increase the number of our products and services utilized by existing clients. The sales cycle for some of our products and services is often lengthy and may involve significant commitment of client personnel. As a consequence, the commencement date of a client engagement often cannot be accurately forecasted. As discussed below, certain of our client contracts contain terms that result in revenue that is deferred and cannot be recognized until the occurrence of certain events. As a result, the period of time between contract signing and recognition of associated revenue may be lengthy, and we are not able to predict with certainty the period in which revenue will be recognized.
Fee discounts, pressure to not increase or even decrease our rates, and less advantageous contract terms could result in the loss of clients, lower revenues and operating income, higher costs, and less profitable engagements. More discounts or write-offs than we expect in any period would have a negative impact on our results of operations.
Other fluctuations in our quarterly results of operations may be due to a number of other factors, some of which are not within our control, including:
the timing and volume of client invoices processed and payments received, which may affect the fees payable to us under certain of our engagements;
client decisions regarding renewal or termination of their contracts;
the amount and timing of costs related to the development or acquisition of technologies or businesses; and
unforeseen legal expenses, including litigation and other settlement gains or losses.
We base our annual employee bonus expense upon our expected annual adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) for that year. If we experience lower adjusted EBITDA in a quarter without a corresponding change to our full-year adjusted EBITDA expectation, our estimated bonus expense will not be reduced, which will have a negative impact on our quarterly results of

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operations for that quarter. Our quarterly results of operations may vary significantly and period-to-period comparisons of our results of operations may not be meaningful. The results of one quarter should not be relied upon as an indication of future performance. If our quarterly results of operations fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially.
Revenues from our performance-based engagements are difficult to predict, and the timing and extent of recovery of our costs is uncertain.
We have engagement agreements under which our fees include a significant performance-based component. Performance-based fees are contingent on the achievement of specific measures, such as our clients meeting cost-saving or other contractually-defined goals. The achievement of these contractually-defined goals may be subject to acknowledgment by the client and is often impacted by factors outside of our control, such as the actions of the client or other third parties. To the extent that any revenue is contingent upon the achievement of a performance target, we recognize such revenue using a process that requires us to make significant management judgments, estimates, and assumptions. While we believe that the estimates and assumptions we have used for revenue recognition are reasonable, subsequent changes could have a material impact to our future financial results. The percentage of our revenues derived from performance-based fees for the years ended December 31, 2019, 2018, and 2017, was 8.9%, 6.1%, and 4.9%, respectively. A greater number of performance-based fee arrangements may result in increased volatility in our working capital requirements and greater variations in our quarter-to-quarter results, which could affect the price of our common stock. In addition, an increase in the proportion of performance-based fee arrangements may temporarily offset the positive effect on our operating results from an increase in our utilization rate until the related revenues are recognized.
The profitability of our fixed-fee engagements with clients may not meet our expectations if we underestimate the cost of these engagements.
When making proposals for fixed-fee engagements, we estimate the costs and timing for completing the engagements. These estimates reflect our best judgment regarding the efficiencies of our methodologies and consultants as we plan to deploy them on engagements. Any increased or unexpected costs or unanticipated delays in connection with the performance of fixed-fee engagements, including delays caused by factors outside our control, could make these contracts less profitable or unprofitable, which would have an adverse effect on our profit margin. For the years ended December 31, 2019, 2018, and 2017, fixed-fee engagements represented 45.8%, 47.4%, and 46.7% of our revenues, respectively.
Our business is becoming increasingly dependent on information technology and will require additional investments in order to grow and meet the demands of our clients.
We depend on the use of sophisticated technologies and systems. Some of our practices provide services that are increasingly dependent on the use of software applications and systems that we do not own and could become unavailable. Moreover, our technology platforms will require continuing investments by us in order to expand existing service offerings and develop complementary services. For example, we have subscription-based offerings that require us to incur costs associated with upgrades and maintenance that could impact profit margins associated with those offerings and related services. Our future success depends on our ability to adapt our services and infrastructure while continuing to improve the performance, features, and reliability of our services in response to the evolving demands of the marketplace.
Adverse changes to our relationships with key third-party vendors, or in the business of our key third-party vendors, could unfavorably impact our business.
A portion of our services and solutions depend on technology or software provided by third-party vendors. Some of these third-party vendors refer potential clients to us, and others require that we obtain their permission prior to accessing their software while performing services for our clients. These third-party vendors could terminate their relationship with us without cause and with little or no notice, which could limit our service offerings and harm our financial condition and operating results. In addition, if a third-party vendor’s business changes, is reduced or fails to adapt to changing market demands, that could adversely affect our business. Moreover, if third-party technology or software that is important to our business does not continue to be available or utilized within the marketplace, or if the services that we provide to clients is no longer relevant in the marketplace, our business may be unfavorably impacted.
We could experience system failures, service interruptions, or security breaches that could negatively impact our business.
Our organization is comprised of employees who work on matters throughout the United States and overseas. Our technology platform is a “virtual office” from which we all operate. We may be subject to disruption to our operating systems from technology events that are beyond our control, including the possibility of failures at third-party data centers, disruptions to the Internet, natural disasters, power losses, and malicious attacks. In addition, despite the implementation of security measures, our infrastructure and operating systems, including the Internet and related systems, may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses, programming errors, denial-of-service attacks, or other attacks by third parties seeking to disrupt operations or misappropriate information or similar physical or electronic breaches of security. While we have taken and are taking reasonable steps to prevent and mitigate the damage of such events, including implementation of system security measures, information backup, and disaster recovery processes, those steps

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may not be effective and there can be no assurance that any such steps can be effective against all possible risks. We will need to continue to invest in technology in order to achieve redundancies necessary to prevent service interruptions. Access to our systems as a result of a security breach, the failure of our systems, or the loss of data could result in legal claims or proceedings, liability, or regulatory penalties and disrupt operations, which could adversely affect our business and financial results.
Our reputation could be damaged and we could incur additional liabilities if we fail to protect client and employee data through our own accord or if our information systems are breached.
We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, partners, and employees. These locations include Canada, the United Kingdom, Switzerland, Singapore, and India, all of which have their own either recently updated or potential new data protection laws. The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information.
In providing services to clients, we may manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information. As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act (HIPAA), and international laws such as the European Union's General Data Protection Regulation (GDPR), which went into effect in 2018. In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations. Continued governmental focus on data security and privacy may lead to additional legislative and regulatory action, which could increase the complexity of doing business. The increased emphasis on information security and the requirements to comply with applicable U.S. and foreign data security and privacy laws and regulations may increase our costs of doing business and negatively impact our results of operations.
These laws and regulations are increasing in complexity and number. If any person, including any of our employees or third-party vendors, negligently disregards or intentionally breaches our established controls or contractual obligations with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution. We maintain certain insurance coverages for cybersecurity incidents through our directors and officers insurance policy, in amounts we believe to be reasonable and at a cost that is included in our general insurance premiums.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future.
Our international expansion could result in additional risks.
We operate both domestically and internationally, including in Canada, Europe, Asia and the Middle East. Although historically our international operations have been limited, we intend to continue to expand internationally. Such expansion may result in additional risks that are not present domestically and which could adversely affect our business or our results of operations, including:
•compliance with additional U.S. regulations and those of other nations applicable to international operations;
•cultural and language differences;
•employment laws, including immigration laws affecting the mobility of employees, and rules and related social and cultural factors;
•losses related to start-up costs, lack of revenue, higher costs due to low utilization, and delays in purchase decisions by prospective clients;
•currency fluctuations between the U.S. dollar and foreign currencies;
restrictions on the repatriation of earnings;
•potentially adverse tax consequences and limitations on our ability to utilize losses generated in our foreign operations;
•different regulatory requirements and other barriers to conducting business;
•different or less stable political and economic environments;
•greater personal security risks for employees traveling to or located in unstable locations;
•health emergencies or pandemics, including COVID-19; and
•civil disturbances or other catastrophic events.

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Further, conducting business abroad subjects us to increased regulatory compliance and oversight. For example, we are subject to laws prohibiting certain payments to governmental officials, such as the Foreign Corrupt Practices Act, which increases the risk from our international operations relative to our competitors who do not operate outside the United States. A failure to comply with applicable regulations could result in regulatory enforcement actions as well as substantial civil and criminal penalties assessed against us and our employees.
Our obligations underIn addition, expanding into new geographic areas and expanding current service offerings is challenging and may require integrating new employees into our culture as well as assessing the Amended Credit Agreement are secured by a pledge of certain ofdemand in the equity interests in our subsidiaries and a lien on substantially all of our assets and those of our subsidiary grantors.applicable market. If we default oncannot manage the risks associated with new employees, new service offerings or new locations effectively, we are unlikely to be successful in these obligations,efforts, which could harm our lenders may foreclose onability to sustain profitability and our assets, including our pledged equity interestbusiness prospects.
The Company has significant operations in our subsidiaries.India, which presents additional risks.
We entered into a second amendedhave significant operations in India, including over 1,500 employees, which subjects the Company to various country-specific risks. For example, from time to time, India has experienced instances of civil unrest, terrorism and restated security agreement with Bankhostilities among neighboring countries. Terrorist attacks, military activity, rioting, or civil or political unrest in the future could influence the Indian economy and our operations by disrupting operations and communications and making travel within India more difficult and less desirable. Further, India has experienced natural disasters such as earthquakes, tsunamis, floods, landslides and drought in the past few years. The extent and severity of America (the “Security Agreement”)these natural disasters determines their impact on the Indian economy. Our operations and a second amendedemployees in India may be adversely affected by these or other social and restated pledge agreement (the “Pledge Agreement”) in connection with our entry intopolitical uncertainties or change, military activity, health-related risks, acts of terrorism or natural disasters. Additionally, as the Second Amended and Restated Credit Agreement, dated as
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Table of March 31, 2015 (as amended and restated, the “Amended Credit Agreement”). Pursuant to the Security Agreement and to secure our obligations under the Amended Credit Agreement, we granted our lenders a first-priority lien, subject to permitted liens, on substantially allContents

overall population of the personal property assets that weIndia is large, and the subsidiary grantors own. Pursuant tocities in which we operate are dense, the Pledge Agreement, we granted our lenders a security interest in 100%impact of the voting stock or other equity interests in our domestic subsidiaries and 65% of the voting stock or other equity interests in certain of our foreign subsidiaries. If we default on our obligations under the Amended Credit Agreement, our lendersany such occurrences could accelerate our indebtedness and may be able to exercise their liens on the equity interests subject to the Pledge Agreement and their liens on substantially all of our assets and the assets of our subsidiary grantors, which would have a materialdisproportionate adverse effect on our operations.
Additionally, India’s reputation for potential corruption and the challenges presented by India’s complex business operations,environment may increase our risk of violating applicable anti-corruption and anti-bribery laws. We face the risk that our employees or any third parties we engage to do work on our behalf may take action determined to be in violation of anti-corruption laws in any jurisdiction in which we conduct business, including the Foreign Corrupt Practices Act, India’s Prevention of Money Laundering Act, 2002 and Indian Penal Code. If we violate applicable anti-corruption laws or our internal policies designed to ensure ethical business practices, we could face financial penalties and/or reputational harm that would negatively impact our financial condition and liquidity. In addition,results of operations.
Additionally, since 1991, successive Indian governments have generally pursued policies of economic liberalization and financial sector reforms, including by significantly relaxing restrictions on the covenants containedprivate sector. Nevertheless, the role of the Indian central and state governments in the Amended Credit Agreement impose restrictions on our ability to engageIndian economy as producers, consumers and regulators has remained significant and there is no assurance that such liberalization policies will continue. A significant change in certain activities, such as the incurrenceIndia’s policy of additional indebtedness, certain investments, certain acquisitionseconomic liberalization and dispositions, and the payment of dividends.
Our indebtednessderegulation or any social or political uncertainties could adversely affect our ability to raise additional capital to fund our operationsbusiness and obligations, expose us to interest rate risk to the extent of our variable-rate debt, and adversely affect our financial results.
At December 31, 2019, we had outstanding indebtedness of $205.0 million on our revolving line of credit that becomes due and payableeconomic conditions in full upon maturity on September 27, 2024, and $3.9 million principal amount of our promissory note due March 1, 2024. Our ability to make scheduled payments of the principal, to pay interest, or to refinance our indebtedness, depends on our future performance. If we are unable to generate cash flow from operations sufficient to satisfy our obligations under our current indebtedness and any future indebtedness, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing, or obtaining additional equity capital on terms that may be onerous or dilutive. Our ability to refinance our current indebtedness or future indebtedness will depend on the capital marketsIndia generally and our financial condition at such time. We may not be able to engagebusiness and employees in any of these activities or engage in these activities on desirable terms, which could result in a default on the current indebtedness or future indebtedness.particular.
The interest rates on our revolving line of credit and promissory note are linked to LIBOR. In 2017, the Financial Conduct Authority (FCA)Lastly, unfavorable fluctuations in the U.K. announced that it would phase out LIBOR as a benchmarkcurrency exchange rate bybetween the end of 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021, or whether different benchmark rates will develop. If LIBOR ceases to exist, the methodU.S. dollar and rates used to calculate our interest rates and/or payments on our debt may result in interest rates and/or payments that are higher than, or that do not otherwise correlate over time with, the interest rates and/or payments that would have been applicable to our obligations if LIBOR was available in its current form, whichIndian rupee could have a material adverse effect on our financial condition and results of operations. WhileAs we continue to take steps to mitigategrow our operations in India, more of our expenses will be incurred in the impactIndian rupee. An increase in the value of the phase-out or replacement of LIBOR, such efforts may not prove successful. Furthermore,Indian rupee against the U.S. or global financial markets may be disrupted as a resultdollar, in which our revenue is primarily recorded, could increase costs for delivery of services and decrease the phase-out or replacement of LIBOR, which could also have a material adverse effect on our business, financial condition and results of operations.
In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences such as exposing us to the risk of increased interest rates because someprofitability of our borrowings are at variable interest rates; making us more vulnerable to adverse changesengagements that utilize our employees in general U.S. and worldwide economic, industry, and competitive conditions and adverse changes in government regulation; or reducing our capacity to obtain additional financing and flexibility in planning for, or reacting to, changes in our business and our industry. Any of these factors could materially and adversely affect our business, financial condition, and results of operations.
Our business performance might not be sufficient for us to meet the full-year financial guidance that we provide publicly.
We provide full-year financial guidance to the public based upon our expectations regarding our financial performance. While we believe that our annual financial guidance provides investors and analysts with insight to our view of the Company’s future performance, such financial guidance is based on assumptions that may not always prove to be accurate and may vary from actual results. If we fail to meet the full-year financial guidance that we provide, or if we find it necessary to revise such guidance during the year, the market value of our common stock could be adversely affected.

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The healthcare industry is an area of significant focus for our business, and factors that adversely affect the financial condition of the healthcare industry could consequently affect our business.
We derive a significant portion of our revenue from clients in the healthcare industry. As a result, our financial condition and results of operations could be adversely affected by conditions affecting the healthcare industry generally and hospitals and health systems particularly. The healthcare industry is highly regulated and is subject to changing political, legislative, regulatory, and other influences. Uncertainty in any of these areas could cause our clients to delay or postpone decisions to use our services. Existing and new federal and state laws and regulations affecting the healthcare industry could create unexpected liabilities for us, could cause us or our clients to incur additional costs, and could restrict our or our clients’ operations. Many healthcare laws are complex and their application to us, our clients, or the specific services and relationships we have with our clients are not always clear. In addition, federal and state legislatures have periodically introduced programs to reform or amend the U.S. healthcare system at both the federal and state level, such as the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, and continue to consider further significant reforms. Due to the significant implementation issues arising under these laws and potential new legislation, it is unclear what long-term effects they will have on the healthcare industry and in turn on our business, financial condition, and results of operations. Our failure to accurately anticipate the application of new laws and regulations, or our failure to comply with such laws and regulations, could create liability for us, result in adverse publicity and negatively affect our business.
There are many factors that could affect the purchasing practices, operations, and, ultimately, the operating funds of healthcare organizations, such as reimbursement policies for healthcare expenses, federal and state budgetary considerations, consolidation in the healthcare industry, and regulation, litigation, and general economic conditions. In particular, we could be required to make unplanned modifications of our products and services (which would require additional time and investment) or we could suffer reductions in demand for our products and services as a result of changes in regulations affecting the healthcare industry, such as changes in the way that healthcare organizations are paid for their services (e.g., based on patient outcomes instead of services provided). Furthermore, as a result of the current presidential administration and the upcoming presidential election, there is an increased uncertainty surrounding the future of the Affordable Care Act and the regulation of the healthcare industry, and therefore healthcare organizations may wait to buy services such as ours until the regulatory environment is more certain.
In addition, state tax authorities have challenged the tax-exempt status of some hospitals and other healthcare facilities claiming such status on the basis that they are operating as charitable and/or religious organizations. If the tax-exempt status of any of our clients is revoked or compromised by new legislation or interpretation of existing legislation, that client’s financial health could be adversely affected, which could adversely impact demand for our services, our sales, revenue, financial condition, and results of operations.India.
Additional hiring, departures, and business acquisitions and dispositions, as well as other organizational changes could disrupt our operations, increase our costs or otherwise harm our business.
Our business strategy is dependent in part upon our ability to grow by hiring individuals or groups of individuals and by acquiring complementary businesses. However, we may be unable to identify, hire, acquire, or successfully integrate new employees and acquired businesses without substantial expense, delay, or other operational or financial obstacles. From time to time, we will evaluate the total mix of services we provide and we may conclude that businesses may not achieve the results we previously expected. Competition for future hiring and acquisition opportunities in our markets could increase the compensation we offer to potential employees or the prices we pay for businesses we wish to acquire. In addition, we may be unable to achieve the financial, operational, and other benefits we anticipate from any hiring or acquisition, as well as any disposition, including those we have completed so far. New acquisitions could also negatively impact existing practices and cause current employees to depart. Hiring additional employees or acquiring businesses could also involve a number of additional risks, including the diversion of management’s time, attention, and resources from managing and marketing our Company; the potential assumption of liabilities of an acquired business; the inability to attain the expected synergies with an acquired business; and the perception of inequalities if different groups of employees are eligible for different benefits and incentives or are subject to different policies and programs.
Selling practices and shutting down operations present similar challenges in a service business. Dispositions not only require management’s time, but they can impair existing relationships with clients or otherwise affect client satisfaction, particularly in situations where the divestiture eliminates only part of the complement of consulting services provided to a client. Dispositions may also involve continued financial involvement, as we may be required to retain responsibility for, or agree to indemnify buyers against, liabilities related to a business sold.
Our abilityAdditionally, effective January 1, 2022, we modified our operating model to maintainreport under three industries, which are our reportable segments. The new operating model was designed to strengthen Huron's go-to-market strategy and attract new business depends uponsupport our reputation, the professional reputationgrowth. The full implementation across all areas of our revenue-generating employees,business to effect this change may take place over several years. If we do not successfully implement and continue to refine this change to our operating model, our business and results of operation may be negatively impacted.
The healthcare and education industries are areas of significant focus for our business, and factors that adversely affect the qualityfinancial condition of these industries could consequently affect our services.business.
AsWe derive a professional services firm, our ability to secure new engagements depends heavily upon our reputation and the individual reputations of our professionals. Any factor that diminishes our reputation or that of our employees, including not meeting client expectations or misconduct by our employees, could make it substantially more difficult for us to attract new engagements and clients. Similarly, because we obtain many of our new engagements from former or current clients or from referrals by those clients or by law firms that we have worked with in the past,

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any client that questions the quality of our work or that of our consultants could impair our ability to secure additional new engagements and clients.
A significant portion of our revenues is derivedrevenue from clients in the healthcare and education industries. As a limited numberresult, our financial condition and results of operations could be adversely affected by conditions affecting these industries, both generally and those specific to the types of clients we serve in these industries, including hospitals and health systems, academic medical centers, and higher education institutions. The healthcare and education industries are highly regulated and are subject to changing political, legislative, regulatory, and other influences. Uncertainty in any of these areas could cause our clients to delay or postpone decisions to use our services. Existing and new federal and state laws and regulations affecting the healthcare and education industries could create unexpected liabilities for us, could cause us or our clients to incur additional costs, and could restrict our or our clients’ operations.
Additionally, regulatory and legislative changes in these industries could reduce the demand for our services, decreasing our competitive position or potentially rendering certain of our service offerings obsolete, change client buying patterns or decision making or require us to make unplanned modifications to our service offerings, which could require additional time and investment. If we fail to accurately anticipate
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the application of the laws and regulations affecting our clients and the industries they serve, if anticipated changes in regulation or regulatory uncertainty impact client buying patterns, or if such laws and regulations decrease our competitive position or limit the applicability of our service offerings, our results of operations and financial condition could be adversely impacted. Similarly, certain of our healthcare and education clients may experience or anticipate experiencing financial distress or face complex challenges as a result of general economic conditions or operations-specific reasons. Such clients may not have the financial resources or stakeholder support to start new projects or to continue existing projects.
Specifically with respect to healthcare, many healthcare laws are complex and their application to us, our clients, or the specific services and relationships we have with our clients are not always clear. In addition, federal and state legislatures have periodically introduced programs to reform or amend the U.S. healthcare system at both the federal and state level, such as the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, and continue to consider further significant reforms. Due to the significant implementation issues arising under these laws and potential new legislation, it is unclear what long-term effects they will have on the healthcare industry and in turn on our business, financial condition, and results of operations. Our failure to accurately anticipate the application of new laws and regulations, or our failure to comply with such laws and regulations, could create liability for us, result in adverse publicity and negatively affect our business.
There are many factors that could affect the purchasing practices, operations, and, ultimately, the operating funds of healthcare and education organizations, such as reimbursement policies for healthcare expenses, student loan policies or regulations, federal and state budgetary considerations, consolidation in either industry, and regulation, litigation, and general economic conditions. In particular, we could be required to make unplanned modifications of our products and services (which would require additional time and investment) or we could suffer reductions in demand for our products and services as a result of changes in regulations affecting either industry, such as changes in the way that healthcare organizations are paid for their services (e.g., based on patient outcomes instead of services provided).
In addition, state tax authorities have challenged the tax-exempt status of some hospitals and other healthcare facilities claiming such status on the basis that they are operating as charitable and/or religious organizations. If the tax-exempt status of any of our clients is revoked or compromised by new legislation or interpretation of existing legislation, that client’s financial health could be adversely affected, which could adversely impact demand for our services, our sales, revenue, financial condition, and results of operations.
Our digital offerings are a significant focal point for our business, including a focus on the adaptation and expansion of our services and products in response to ongoing changes in customer demand, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations.
Our financial results depend, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology to serve the evolving needs of our clients. Examples of areas of significant change include digital and analytic services and products, which are continually evolving. Technological developments may materially affect the cost and use of current technology by our clients and some of these technological developments may reduce and replace some of our historical services and products. This changing technological landscape may cause clients to delay spending under existing contracts and engagements and delay entering into new contracts while they evaluate new technologies. Such spending delays can negatively impact our results of operations.
Technological developments, which may be rapid, also could shift demand to new services and products. If, as a result of new technologies, our clients demand new services and products, we may be less competitive in these new areas or we may need to make significant investment in our portfolio of software products to meet that demand. Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas and enhance our current portfolio of software products. If we do not sufficiently invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or make the right strategic investments, or fail to timely deliver on our product roadmap for our portfolio of software products to respond to these developments and successfully drive innovation, our services and products, our results of operations, and our engagement agreements, including those relatedability to develop and maintain a competitive advantage and execute on our largest clients, cangrowth strategy could be adversely affected. Additionally, as we expand our services and products into these new areas, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may negatively affect our reputation and demand for our services and products.
Many of our client contracts are short-term in duration and may be terminated by our clients with little or no notice and without penalty, which may cause our operating results to be unpredictable and may result in unexpected declines in our utilization and revenues.
As a consulting firm, we have derived, and expect to continue to derive, a significant portion of our revenues from a limited number of clients. Our clients typically retain us on an engagement-by-engagement basis, rather than under fixed-term contracts.contracts, and many of our client contracts are 12 months or less in duration. The volume of work performed for any particular client is likely to vary from year to year, and a major client in one fiscal period may not require or may decide not to use our services in any subsequent fiscal period. Moreover, a large portion of our new engagements comescome from existing clients. Accordingly, the failure to obtain new large engagements or multiple engagements from existing or new clients could have a material adverse effect on the amount of revenues we generate.
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In addition, almost alla large portion of our engagement agreements can be terminated by our clients with little or no notice and without penalty. In client engagements that involve multiple engagements or stages, there is a risk that a client may choose not to retain us for additional stages of an engagement or that a client will cancel or delay additional planned engagements. For clients in bankruptcy, a bankruptcy court could elect not to retain our interim management consultants, terminate our retention, require us to reduce our fees for the duration of an engagement, elect not to approve claims against fees earned by us prior to or after the bankruptcy filing, or subject previously paid amounts to be returned to the bankruptcy estate as preferential payments under the bankruptcy code.
Terminations of engagements, cancellations of portions of the project plan, delays in the work schedule, or reductions in fees could result from factors unrelated to our services. When engagements are terminated or reduced, we lose the associated future revenues, and we may not be able to recover associated costs or redeploy the affected employees in a timely manner to minimize the negative impact. In addition, our clients’ ability to terminate engagements with little or no notice and without penalty makes it difficult to predict our operating results in any particular fiscal period.
Our ability to maintain and attract new business depends upon our reputation, the professional reputation of our revenue-generating employees, and the quality of our services.
As a professional services firm, our ability to secure new engagements depends heavily upon our reputation and the individual reputations of our professionals. Any factor that diminishes our reputation or that of our employees, including not meeting client expectations or misconduct by our employees, could make it substantially more difficult for us to attract new engagements and clients. Similarly, because we obtain many of our new engagements from former or current clients, or from referrals by those clients, or by law firms that we have worked with in the past, any client that questions the quality of our work or that of our consultants could impair our ability to secure additional new engagements and clients.
The consulting services industry is highly competitive and we may not be able to compete effectively.
The consulting services industry in which we operate includes a large number of participants and is intensely competitive. We face competition from other business operations and financial consulting firms, general management consulting firms, the consulting practices of major accounting firms, technical and economic advisory firms, regional and specialty consulting firms, consulting divisions of our technology partners, and the internal professional resources of organizations. In addition, because there are relatively low barriers to entry, we expect to continue to face competition from new entrants into the business operations and financial consulting industries. Competition in several of the sectors in which we operate is particularly intense as many of our competitors are seeking to expand their market share in these sectors. Many of our competitors have a greater national and international presence, as well as have a significantly greater number of personnel, financial, technical, and marketing resources. In addition, these competitors may generate greater revenues and have greater name recognition than we do. Some of our competitors may also have lower overhead and other costs and, therefore, may be able to more effectively compete through lower cost service offerings. Our ability to compete also depends in part on the ability of our competitors to hire, retain, and motivate skilled professionals, the price at which others offer comparable services, the ability of our competitors to offer new and valuable products and services to clients, and our competitors’ responsiveness to their clients. If we are unable to compete successfully with our existing competitors or with any new competitors, our financial results will be adversely affected.
Risks Related to Information Technology
Our business is becoming increasingly dependent on information technology and will require additional investments in order to grow and meet the demands of our clients.
We depend on the use of sophisticated technologies and systems. Many of our practices provide services that are increasingly dependent on the use of software applications and systems that we do not own and which could become unavailable. Moreover, our technology platforms will require continuing investments by us in order to expand existing service offerings and develop complementary services. For example, we have subscription-based offerings that require us to incur costs associated with upgrades and maintenance that could impact profit margins associated with those offerings and related services. Our future success depends on our ability to adapt our services and infrastructure while continuing to improve the performance, features, and reliability of our services in response to the evolving demands of the marketplace.
Adverse changes to our relationships with key third-party vendors or the business of our key third-party vendors could unfavorably impact our business.
A portion of our services and solutions depend on technology or software provided by third-party vendors. Some of these third-party vendors refer potential clients to us, and others require that we obtain their permission prior to accessing their software while performing services for our clients. These third-party vendors could terminate their relationship with us without cause and with little or no notice, which could limit our service offerings and harm our financial condition and operating results. In addition, if a third-party vendor’s business changes, is reduced, or fails to adapt to changing market demands, it could adversely affect our business. Moreover, if third-party technology or software that is important to our business does not continue to be available or utilized within the marketplace, or if the services that we provide to clients are no longer relevant in the marketplace, our business may be unfavorably impacted.
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We could experience system failures, service interruptions, or security breaches that could negatively impact our business.
Our organization is comprised of employees who work on matters throughout the United States and around the world. Our technology platform is a “virtual office” from which we all operate. We may be subject to disruption to our operating systems from technology events that are beyond our control, including the possibility of failures at third-party data centers, disruptions to the internet, natural disasters, power losses, and malicious attacks. In addition, despite the implementation of security measures, our infrastructure and operating systems, including the internet and related systems, may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses, programming errors, denial-of-service attacks, or other attacks by third parties seeking to disrupt operations or misappropriate information or similar physical or electronic breaches of security. While we have taken and are taking reasonable steps to prevent and mitigate the damage of such events, including implementation of system security measures, information backup, and disaster recovery processes, and where possible, obtaining insurance against such events, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks. We will need to continue to invest in technology in order to achieve redundancies necessary to prevent service interruptions. Access to our systems as a result of a security breach, the failure of our systems, or the loss of data could result in legal claims or proceedings, liability, or regulatory penalties and disrupt operations, which could adversely affect our business and financial results.
Risks Related to Legal Matters
Our reputation could be damaged and we could incur additional liabilities if we fail to protect client and employee data through our own accord or if our information systems are breached.
We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, partners, and employees. These locations include India, Canada, Switzerland, Singapore, and the United Kingdom, all of which have their own either recently updated or potential new data protection laws. The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information.
In providing services to clients, we may manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information. As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act (HIPAA), and international laws such as the European Union's General Data Protection Regulation (GDPR), which went into effect in 2018. In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations. Continued governmental focus on data security and privacy may lead to additional legislative and regulatory action, which could increase the complexity of doing business. The increased emphasis on information security and the requirements to comply with applicable U.S. and foreign data security and privacy laws and regulations may increase our costs of doing business and negatively impact our results of operations.
These laws and regulations are increasing in complexity and number. If any person, including any of our employees or third-party vendors, negligently disregards or intentionally breaches our established controls or contractual obligations with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution. We maintain certain insurance coverages for cybersecurity incidents through our directors and officers insurance policy, in amounts we believe to be reasonable and at a cost that is included in our general insurance premiums.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future.
Our engagements could result in professional liability, which could be very costly and hurt our reputation.
Our engagements typically involve complex analyses and the exercise of professional judgment. As a result, we are subject to the risk of professional liability. From time to time, lawsuits with respect to our work are pending. Litigation alleging that we performed negligently or breached any other obligations could expose us to significant legal liabilities and, regardless of outcome, is often very costly, could distract our management, could damage our reputation, and could harm our financial condition and operating results. We also face increased litigation risk as a result of an expanded workforce. In addition, certain of our engagements, including interim management engagements and corporate restructurings, involve greater risks than other consulting engagements. We are not always able to include provisions in our engagement agreements that are designed to limit our exposure to legal claims relating to our services. While we attempt to identify and mitigate our exposure with respect to liability arising out of our consulting engagements, these efforts may be ineffective and an actual or alleged error or omission on our part or the part of our client or other third parties in one or more of our engagements could have an adverse impact on our financial condition and results of operations. In addition, we carry professional liability insurance to cover many of these types of claims, but the policy limits and the breadth of coverage may be inadequate to cover any particular claim or all claims plus the cost of legal defense. For example, we provide services on engagements in which the impact on a client may substantially exceed the limits of our errors
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and omissions insurance coverage. If we are found to have professional liability with respect to work performed on such an engagement, we may not have sufficient insurance to cover the entire liability.
Our business could be materially adversely affected if we incur liability in connection with service offering innovation, including new or expanded service offerings.
We may grow our business through service offering innovation, including by entering into new or expanded lines of business beyond our core services. To the extent we enter into new or expanded lines of business, we may face new risks and uncertainties, including the possibility these new or expanded lines of business involve greater risks than our core services, that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, that the required investment of capital and other resources is greater than anticipated, and that we lose existing clients due to the perception that we are no longer focusing on our core business. Entry into new or expanded lines of business may also subject us to new laws and regulations with which we are not familiar and may lead to increased litigation and regulatory risk. For example, our recently launched Huron Managed Services business within the Healthcare industry provides revenue cycle managed services to hospitals and health systems. These services include the coding, preparation, submission and collection of claims for medical service to payors for reimbursement. Such claims are governed by U.S. federal and state laws. U.S. federal law provides civil liability to any persons that knowingly submit, or cause to be submitted, a claim to a payor, including Medicare, Medicaid and private health plans, seeking payment for any services or items that overbills or bills for services or items that have not been provided to the patient. U.S. federal law may also impose criminal penalties for intentionally submitting such false claims. In addition, federal and state law regulates the collection of debt and may impose monetary penalties for violating those regulations. In connection with these laws, we may be subjected to U.S. federal or state government investigations and possible penalties may be imposed upon us, false claims actions may have to be defended and private payors may file claims against us. Any investigation or proceeding related to these laws, even if unwarranted or without merit, may have a material adverse effect on our reputation, business, results of operations and financial condition.
Our intellectual property rights in our “Huron Consulting Group” name are important, and any inability to use that name could negatively impact our ability to build brand identity.
We believe that establishing, maintaining, and enhancing the “Huron Consulting Group” name and “Huron” brand is important to our business. We are, however, aware of a number of other companies that use names containing “Huron.” There could be potential trade name or service mark infringement claims brought against us by the users of these similar names and marks and those users may have trade name or service mark rights that are senior to ours. If another company were to successfully challenge our right to use our name, or if we were unable to prevent a competitor from using a name that is similar to our name, our ability to build brand identity could be negatively impacted.
Conflicts of interest could preclude us from accepting engagements thereby causing decreased utilization and revenues.
We provide services in connection with bankruptcy and other proceedings that usually involve sensitive client information and frequently are adversarial. In connection with bankruptcy proceedings, we are required by law to be “disinterested” and may not be able to provide multiple services to a particular client. In addition, our engagement agreement with a client or other business reasons may preclude us from accepting engagements from time to time with the client's competitors or adversaries. Moreover, in many industries in which we provide services, there has been a continuing trend toward business consolidations and strategic alliances. These consolidations and alliances reduce the number of companies that may seek our services and increase the chances that we will be unable to accept new engagements as a result of conflicts of interest. If we are unable to accept new engagements for any reason, our consultants may become underutilized, which would adversely affect our revenues and results of operations in future periods.
Risks Related to Financial Management and Performance
Our financial results could suffer if we are unable to achieve or maintain adequate utilization and suitable billing rates for our consultants, or if we are slow to respond to the market's return to a predominantly in-person service delivery model.
Our profitability depends to a large extent on the utilization and billing rates of our professionals. Utilization of our professionals is affected by a number of factors, including:
•the number and size of client engagements;
•the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable;
•our ability to transition our consultants efficiently from completed engagements to new engagements;
•the hiring of additional consultants because there is generally a transition period for new consultants that results in a temporary drop in our utilization rate;
•the use of independent contractors as a substitute for hiring additional consultants;
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•unanticipated changes in the scope of client engagements;
•our ability to forecast demand for our services and thereby maintain an appropriate level of consultants; and
•conditions affecting the industries in which we practice as well as general economic conditions.
The billing rates of our consultants that we are able to charge are also affected by a number of factors, including:
•our clients’ perception of our ability to add value through our services;
•the market demand for the services we provide;
•an increase in the number of engagements in the government sector, which are subject to federal contracting regulations;
•introduction of new services by us or our competitors;
•our competition and the pricing policies of our competitors; and
•current economic conditions.
If we are unable to achieve and maintain adequate overall utilization as well as maintain or increase the billing rates for our consultants, our financial results could materially suffer. Prior to the COVID-19 pandemic, most of our consultants performed services at the physical locations of our clients. Starting in 2020, in response to the shut downs that resulted from the proliferation of the COVID-19 pandemic, substantially all of our services were delivered remotely. If we are out of step with a general market return to in-person service delivery, our business could be materially adversely affected.
Our quarterly and annual results of operations have fluctuated in the past and may continue to fluctuate in the future as a result of certain factors, some of which may be outside of our control.
A key element of our strategy is to market our products and services directly to certain large organizations, such as health systems and acute care hospitals and public universities, and to increase the number of our products and services utilized by existing clients. The sales cycle for some of our products and services is often lengthy and may involve significant commitment of client personnel. As a consequence, the commencement date of a client engagement often cannot be accurately forecasted. As discussed below, certain of our client contracts contain terms that result in revenue that is deferred and cannot be recognized until the occurrence of certain events. As a result, the period of time between contract signing and recognition of associated revenue may be lengthy, and we may not be able to predict with certainty the period in which revenue will be recognized.
Fee discounts, pressure to not increase or even decrease our rates, and less advantageous contract terms could result in the loss of clients, lower revenues and operating income, higher costs, and less profitable engagements. More discounts or write-offs than we expect in any period would have a negative impact on our results of operations.
Other fluctuations in our results of operations may be due to a number of other factors, some of which are not within our control, including:
•the timing and volume of client invoices processed and payments received, which may affect the fees payable to us under certain of our engagements;
•client decisions regarding renewal or termination of their contracts;
•the amount and timing of costs related to the development or acquisition of technologies or businesses; and
•unforeseen legal expenses, including litigation and other settlement gains or losses.
Furthermore, we base our annual employee bonus expense, in part, upon our expected annual adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) for that year. If we experience lower adjusted EBITDA in a quarter without a corresponding change to our full-year adjusted EBITDA expectation, our estimated bonus expense will not be reduced, which will have a negative impact on our quarterly results of operations for that quarter. Our quarterly results of operations may vary significantly and period-to-period comparisons of our results of operations may not be meaningful. The results of one quarter should not be relied upon as an indication of future performance.
If our quarterly or annual results of operations fall below the expectations of our annual and long-term forecasts, and therefore fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially.
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Revenues from our performance-based engagements are difficult to predict, and the timing and extent of recovery of our costs is uncertain.
We have certain engagement agreements under which our fees include a significant performance-based component. Performance-based fees are contingent on the achievement of specific measures, such as our clients meeting cost-saving or other contractually-defined goals. The achievement of these contractually-defined goals may be subject to acknowledgment by the client and is often impacted by factors outside of our control, such as the actions of the client or other third parties. To the extent that any revenue is contingent upon the achievement of a performance target, we recognize such revenue using a process that requires us to make significant management judgments, estimates, and assumptions. While we believe that the estimates and assumptions we have used for revenue recognition are reasonable, subsequent changes could have a material impact to our future financial results. A greater number of performance-based fee arrangements may result in increased volatility in our working capital requirements and greater variations in our quarter-to-quarter results, which could affect the price of our common stock. In addition, an increase in the proportion of performance-based fee arrangements may temporarily offset the positive effect on our operating results from an increase in our utilization rate until the related revenues are recognized.
The profitability of our fixed-fee engagements with clients may not meet our expectations if we underestimate the cost of these engagements.
When making proposals for fixed-fee engagements, we estimate the costs and timing for completing the engagements. These estimates reflect our best judgment regarding the efficiencies of our methodologies and consultants as we plan to deploy them on engagements. Any increased or unexpected costs, expansion in scope of work without a commensurate increase in fees, or unanticipated delays in connection with the performance of fixed-fee engagements, including delays caused by factors outside our control, could make these contracts less profitable or unprofitable, which would have an adverse effect on our profit margin.
Our business performance might not be sufficient for us to meet the full-year financial guidance that we provide publicly.
We provide full-year financial guidance to the public based upon our expectations regarding our financial performance. While we believe that our annual financial guidance provides investors and analysts with insight to our view of the Company’s future performance, such financial guidance is based on assumptions that may not always prove to be accurate and may vary from actual results. If we fail to meet the full-year financial guidance that we provide, or if we find it necessary to revise or suspend such guidance during the year, the market value of our common stock could be adversely affected.
Risks Related to Capital Resources
Our obligations under the Amended Credit Agreement are secured by a pledge of certain of the equity interests in our subsidiaries and a lien on substantially all of our assets and those of our subsidiary grantors. If we default on these obligations, our lenders may foreclose on our assets, including our pledged equity interest in our subsidiaries.
In the fourth quarter of 2022, we entered into a third amended and restated security agreement with Bank of America (the “Security Agreement”) and a third amended and restated pledge agreement (the “Pledge Agreement”) in connection with our entry into the Third Amended and Restated Credit Agreement, dated as of November 15, 2022 (the “Amended Credit Agreement”). Pursuant to the Security Agreement and to secure our obligations under the Amended Credit Agreement, we granted our lenders a first-priority lien, subject to permitted liens, on substantially all of the personal property assets that we and the subsidiary grantors own. Pursuant to the Pledge Agreement, we granted our lenders a security interest in 100% of the voting stock or other equity interests in our domestic subsidiaries and 65% of the voting stock or other equity interests in certain of our foreign subsidiaries. If we default on our obligations under the Amended Credit Agreement, our lenders could accelerate our indebtedness and may be able to exercise their liens on the equity interests subject to the Pledge Agreement and their liens on substantially all of our assets and the assets of our subsidiary grantors, which would have a material adverse effect on our business, operations, financial condition, and liquidity. In addition, the covenants contained in the Amended Credit Agreement impose restrictions on our ability to engage in certain activities, such as the incurrence of additional indebtedness, certain investments, certain acquisitions and dispositions, and the payment of dividends.
Our indebtedness could adversely affect our ability to raise additional capital to fund our operations and obligations, expose us to interest rate risk to the extent of our variable-rate debt, and adversely affect our financial results.
The Amended Credit Agreement consists of a $600 million senior secured revolving credit facility. At December 31, 2022, we had outstanding indebtedness of $290.0 million on our revolving line of credit that becomes due and payable in full upon maturity on November 15, 2027. Our ability to make scheduled payments of the principal, to pay interest, or to refinance our indebtedness, depends on our future performance. If we are unable to generate cash flow from operations sufficient to satisfy our obligations under our current indebtedness and any future indebtedness, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing, or obtaining additional equity capital on terms that may be onerous or dilutive. Our ability to refinance our current indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to
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engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the current indebtedness or future indebtedness.
In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences such as exposing us to the risk of increased interest rates because our borrowings are at variable interest rates; making us more vulnerable to adverse changes in general U.S. and worldwide economic, industry, and competitive conditions and adverse changes in government regulation; or reducing our capacity to obtain additional financing and flexibility in planning for, or reacting to, changes in our business and our industry. Under the Amended Credit Agreement, we are obligated to pay interest at either one, three or six month Term SOFR or an alternate base rate, in each case plus an applicable margin. The Amended Credit Agreement replaced LIBOR with SOFR as the benchmark rate. SOFR is a relatively new reference rate, has a very limited history and is based on short-term repurchase agreements backed by Treasury securities. Changes in SOFR can be volatile and difficult to predict, and there is no assurance that SOFR will perform similarly to the way LIBOR, our previous benchmark rate, would have performed at any time. Any of these factors could materially and adversely affect our business, financial condition, and results of operations.
Risks Related to Asset Impairment
Our goodwill and other intangible assets represent a substantial amount of our total assets, and we may be required to recognize a non-cash impairment charge for these assets if the performance of one or more of our reporting units falls below our expectations.
Our total assets reflect a substantial amount of goodwill and other intangible assets. At December 31, 2022, goodwill and other intangible assets totaled $648.4 million, or 54%, of our total assets. Goodwill results from our business acquisitions, representing the excess of the fair value of consideration transferred over the fair value of the net assets acquired. We test goodwill for impairment at the reporting unit level, annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. Intangible assets other than goodwill represent purchased assets that lack physical substance but can be distinguished from goodwill. Our intangible assets primarily consist of customer relationships, trade names, technology and software and non-competition agreements, all of which were acquired through business acquisitions. We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. During the year ended December 31, 2020, we recorded non-cash goodwill impairment charges totaling $59.8 million related to reporting units within the legacy Business Advisory segment. During 2022 and 2021, we did not record any goodwill impairment charges. No impairment charges for other intangible assets were recorded in 2022, 2021, or 2020.
Determining the fair value of a reporting unit requires us to make significant judgments, estimates, and assumptions. While we believe that the estimates and assumptions underlying our valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether or not a goodwill impairment charge is recognized and also the magnitude of any such charge. The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in additional goodwill impairment charges.
Refer to “Critical Accounting Policies and Estimates” within Part I - Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 4 “Goodwill and Intangible Assets” within the notes to our consolidated financial statements for further discussion of our business combinations, goodwill, intangible assets, and impairment tests performed.
We may incur impairment charges with respect to our convertible debt investment in Shorelight or our preferred stock investment in Medically Home.
Since 2014, we have invested $40.9 million, in the form of 1.69% convertible debt, in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight Education. Our investment is carried at its fair value of $57.6 million as of December 31, 2022, with unrealized holding gains and losses reported in other comprehensive income. As of December 31, 2022, our investment in Shorelight is in an unrealized gain position. If the investment were to be in an unrealized loss position due to significant credit deterioration of Shorelight, we would recognize an allowance to decrease the carrying value of the investment to the fair value, which may be reversed in the event that the credit of Shorelight improves. As of December 31, 2022, we have not recognized any credit allowance on our investment. In the future, if there are adverse developments in Shorelight's business that may be the result of events within or outside of Shorelight's control, we may incur impairment charges with respect to our convertible debt investment, which could materially impact our results of operations.
In 2019, we invested $5.0 million, in the form of preferred stock, in Medically Home Group, Inc. (“Medically Home”), a hospital-at-home company. Our investment is carried at its fair value of $33.6 million as of December 31, 2022, with unrealized holding gains and losses reported in our results of operations when a observable price change for preferred stock issued by Medically Home with similar rights and preferences to our preferred stock investment occurs. As of December 31, 2022, our investment in Medically Home is in an unrealized gain position. If there is a significant deterioration in the earnings performance, credit rating, or business prospects of Medically Home, or a significant adverse change in the regulatory, economic, or technological environment of Medically Home, we would evaluate our investment for impairment. If during such evaluation it was determined that the fair value of our investment was below its carrying value, we would recognize an impairment for such difference. As of December 31, 2022, we have not identified any indicators of impairment of our
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investment. In the future, if such indicators arise, we may incur impairment charges with respect to our preferred stock investment in Medically Home, which could materially impact our results of operations.
General Risk Factors
Expanding our service offerings may involve additional risks and may not be profitable.
We may choose to develop new service offerings or eliminate service offerings because of market opportunities or client demands. Developing new service offerings involves inherent risks, including:
•our inability to estimate demand for the new service offerings;
•competition from more established market participants;
•exposure to new legal and operational risks;
•a lack of market understanding;
•unanticipated expenses to recruit and hire qualified consultants and to market our new service offerings; and
•unanticipated challenges with service delivery.
Changes in capital markets, legal or regulatory requirements, and general economic or other factors beyond our control could reduce demand for our services, in which case our revenues and profitability could decline.
A number of factors outside of our control affect demand for our services. These include:
•fluctuations in U.S. and global economies;
•the U.S. or global financial markets and the availability, costs, and terms of credit;
•changes in laws and regulations;
•political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the ongoing repercussions of the conflict between Russia and Ukraine; and
•other economic factors and general business conditions, including inflation, rising interest rates, and the negative impact from the COVID-19 pandemic and its downstream impacts.
For example, some portion of the services we provide may be considered by our clients to be more discretionary in nature, as the demand for the services may be impacted by economic slowdowns.We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economy, financial markets, or regulatory and business environment could have on our operations.
Changes in U.S. tax laws could have a material adverse effect on our business, cash flow, results of operations and financial condition.
We are subject to income and other taxes in the U.S. at the state and federal level and also in foreign jurisdictions. Changes in applicable U.S. state, federal or foreign tax laws and regulations, or their interpretation and application, could materially affect our tax expense and profitability.
Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary and other fiscal challenges. Tax rates in the jurisdictions in which we operate may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult for multinational corporations like ourselves to operate with certainty about taxation in many jurisdictions. As a result, we could be materially adversely affected by future changes in tax law or policy (or in their interpretation or enforcement) in the jurisdictions where we operate, including the United States, which could have a material adverse effect on our business, cash flow, results of operations, financial condition, as well as our effective income tax rate.

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The consulting services industry is highly competitive and we may not be able to compete effectively.
The consulting services industry in which we operate includes a large number of participants and is intensely competitive. We face competition from other business operations and financial consulting firms, general management consulting firms, the consulting practices of major accounting firms, regional and specialty consulting firms, and the internal professional resources of organizations. In addition, because there are relatively low barriers to entry, we expect to continue to face additional competition from new entrants into the business operations and financial consulting industries. Competition in several of the sectors in which we operate is particularly intense as many of our competitors are seeking to expand their market share in these sectors. Many of our competitors have a greater national and international presence, as well as have a significantly greater number of personnel, financial, technical, and marketing resources. In addition, these competitors may generate greater revenues and have greater name recognition than we do. Some of our competitors may also have lower overhead and other costs and, therefore, may be able to more effectively compete through lower cost service offerings. Our ability to compete also depends in part on the ability of our competitors to hire, retain, and motivate skilled professionals, the price at which others offer comparable services, the ability of our competitors to offer new and valuable products and services to clients, and our competitors’ responsiveness to their clients. If we are unable to compete successfully with our existing competitors or with any new competitors, our financial results will be adversely affected.
Our intellectual property rights in our “Huron Consulting Group” name are important, and any inability to use that name could negatively impact our ability to build brand identity.
We believe that establishing, maintaining, and enhancing the “Huron Consulting Group” name and “Huron” brand is important to our business. We are, however, aware of a number of other companies that use names containing “Huron.” There could be potential trade name or service mark infringement claims brought against us by the users of these similar names and marks and those users may have trade name or service mark rights that are senior to ours. If another company were to successfully challenge our right to use our name, or if we were unable to prevent a competitor from using a name that is similar to our name, our ability to build brand identity could be negatively impacted.
We may incur impairment charges with respect to our convertible debt investment in Shorelight.
In 2014 and 2015, we invested $27.9 million, in the form of zero coupon convertible debt, in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight Education. The investment is carried at its fair value of $49.5 million as of December 31, 2019, with unrealized holding gains and losses reported in other comprehensive income. In the first quarter of 2020, we invested an additional $13.0 million, in the form of 1.69% convertible debt with a senior liquidation preference. As of December 31, 2019, our investment in Shorelight is in an unrealized gain position. If the investment were to be in an unrealized loss position, we would assess whether the investment is other-than-temporarily impaired. We consider impairments to be other-than-temporary if they are related to significant credit deterioration or if it is likely we will sell the security before the recovery of its cost basis. As of December 31, 2019, we have not identified any factors that indicate an other-than-temporary impairment. In the future, if there are adverse developments in Shorelight's business that may be the result of events within or outside of Shorelight's control or declines in value judged to be other-than-temporary, we may incur impairment charges with respect to our convertible debt investment, which could materially impact our results of operations.
Conflicts of interest could preclude us from accepting engagements thereby causing decreased utilization and revenues.
We provide services in connection with bankruptcy and other proceedings that usually involve sensitive client information and frequently are adversarial. In connection with bankruptcy proceedings, we are required by law to be “disinterested” and may not be able to provide multiple services to a particular client. In addition, our engagement agreement with a client or other business reasons may preclude us from accepting engagements from time to time with the client's competitors or adversaries. Moreover, in many industries in which we provide services, there has been a continuing trend toward business consolidations and strategic alliances. These consolidations and alliances reduce the number of companies that may seek our services and increase the chances that we will be unable to accept new engagements as a result of conflicts of interest. If we are unable to accept new engagements for any reason, our consultants may become underutilized, which would adversely affect our revenues and results of operations in future periods.
ITEM 1B.UNRESOLVED STAFF COMMENTS.
None.
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ITEM 2.PROPERTIES.
We do not own any real estate or other physical properties. Our administrative and principal executive offices are located at 550 W. Van Buren Street, Chicago, Illinois 60607. We believe that our office facilities are suitable and adequate for our business as it is presently conducted. See Note 5 “Leases” within the notes to our consolidated financial statements of this Annual Report on Form 10-K for additional information on our office facilities.

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ITEM 3.LEGAL PROCEEDINGS.
The information required by this Item is incorporated by reference from Note 18 "Commitments, Contingencies and Guarantees" included within the notes to our consolidated financial statements of this Annual Report on Form 10-K.
From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, we are not a party to any litigation or legal proceeding that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results.
ITEM 4.MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is traded on Thethe NASDAQ Global Select Market under the symbol “HURN.” As of February 18, 2020,21, 2023, there were 370295 registered holders of record of Huron’s common stock. A number of Huron’s stockholders hold their shares in street name; therefore, the Company believes that there are substantially more beneficial owners of its common stock.
Dividends
We have not declared or paid dividends on our common stock since we became a public company. Our board of directors re-evaluates this policy periodically. Any determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our results of operations, financial condition, capital requirements, terms of our financing arrangements, and such other factors as the board of directors deems relevant. In addition, the amount of dividends we may pay is subject to the restricted payment provisions of our senior secured credit facility. See the Liquidity and Capital Resources section under Part II—Item 7. "Management's“Management's Discussion and Analysis of Financial Condition and Results of Operations"Operations” for further information on the restricted payment provisions of our senior secured credit facility.
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by this item appears under Part III—Item 12. "Security“Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.”
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Our Stock Ownership Participation Program 2012 Omnibus Incentive Plan, and 2004 Omnibus Stock Plan, which was replaced by the 2012 Omnibus Incentive Plan permit the netting of common stock upon vesting of restricted stock awards to satisfy individual tax withholding requirements. During the quarter ended December 31, 2019,2022, we reacquired 2,8163,751 shares of common stock with a weighted average fair market value of $62.69$68.03 as a result of such tax withholdings.
We currently haveIn November 2020, our board of directors authorized a share repurchase program pursuantpermitting us to which we may, from time to time, repurchase up to $125$50 million of our common stock through OctoberDecember 31, 2020 (the "Share Repurchase Program").2021. The share repurchase program has been subsequently extended and increased, most recently in the fourth quarter of 2022. The current authorization extends the share repurchase program through December 31, 2023 with a repurchase amount of $300 million, of which $108.9 million remains available as of December 31, 2022. The amount and timing of repurchases under the repurchasesshare repurchase program were and will continue to be determined by management and will depend on a variety of factors, including the trading price of our common stock, capacity under our line of credit facility, general market and business conditions, and applicable legal requirements.

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The following table provides information with respect to purchases we made of our common stock during the quarteryear ended December 31, 2019.2022.
Period
Total Number 
of Shares Purchased (1)
Average Price
Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2)
First quarter total662,890 $46.42 523,399 $106,266,001 
Second quarter total500,131 $56.90 497,547 $77,919,714 
Third quarter total693,661 $66.48 685,641 $32,316,573 
October 1, 2022 – October 31, 2022243,227 $69.80 239,798 $115,563,830 
November 1, 2022 – November 30, 202237,102 $73.59 36,780 $112,856,000 
December 1, 2022 – December 31, 202254,587 $73.12 54,587 $108,863,049 
Fourth quarter total334,916 $70.76 331,165 $108,863,049 
2022 Full year total2,191,598 $58.88 2,037,752 $108,863,049 
Period 
Total Number 
of Shares Purchased (1)
 
Average Price
Paid Per Share
 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 
Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2)
October 1, 2019 – October 31, 2019 2,026
 $60.64
 —
 $35,143,546
November 1, 2019 – November 30, 2019 89,263
 $66.63
 89,263
 $29,193,168
December 1, 2019 – December 31, 2019 121,964
 $68.21
 121,174
 $20,924,416
Total 213,253
 $67.48
 210,437
  
(1)The number of shares repurchased in the first, second and third quarters of 2022 included 139,491, 2,584, and 8,020 shares, respectively, to satisfy employee tax withholding requirements. Additionally, in the fourth quarter of 2022, 3,429 shares in October and 322 shares in November were repurchased to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the Share Repurchase Program.
(2)As of the end of the period.
(1)ITEM 6.The number of shares repurchased included 2,026 shares in October 2019 and 790 shares in December 2019 to satisfy employee tax withholding requirements. No shares were repurchased in November 2019 to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the Share Repurchase Program.[Reserved]
(2)As of the end of the period.

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ITEM 6.SELECTED FINANCIAL DATA.
We have derived the following selected consolidated financial data as of and for the years ended December 31, 2015 through 2019 from our consolidated financial statements. The following data reflects the business acquisitions that we have completed through December 31, 2019. The results of operations for acquired businesses have been included in our results of operations since the date of their acquisitions. See Note 3 "Acquisitions" within the notes to our consolidated financial statements for additional information regarding our acquisitions. The following data also reflects the classification of discontinued operations.
The information set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K.
Consolidated Statements of Operations
(in thousands, except per share data):
 Year Ended December 31,
 2019 2018 2017 2016 2015
Revenues and reimbursable expenses:          
Revenues $876,757
 $795,125
 $732,570
 $726,272
 $699,010
Reimbursable expenses 88,717
 82,874
 75,175
 71,712
 70,013
Total revenues and reimbursable expenses 965,474
 877,999
 807,745
 797,984
 769,023
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses) (1):
          
Direct costs 575,602
 521,537
 454,806
 437,556
 401,915
Amortization of intangible assets and software development costs 5,375
 4,247
 10,932
 15,140
 16,788
Reimbursable expenses 88,696
 82,923
 75,436
 71,749
 69,932
Total direct costs and reimbursable expenses 669,673
 608,707
 541,174
 524,445
 488,635
Operating expenses and other losses (gains), net:          
Selling, general and administrative expenses 203,071
 180,983
 175,364
 160,204
 157,902
Restructuring charges 1,855
 3,657
 6,246
 9,592
 3,329
Litigation and other losses (gains), net (1,196) (2,019) 1,111
 (1,990) (9,476)
Depreciation and amortization (1)
 28,365
 34,575
 38,213
 31,499
 25,135
Goodwill impairment charges —
 —
 253,093
 —
 —
Total operating expenses and other losses (gains), net 232,095
 217,196
 474,027
 199,305
 176,890
Operating income (loss) 63,706
 52,096
 (207,456) 74,234
 103,498
Other income (expense), net:          
Interest expense, net of interest income (15,648) (19,013) (18,613) (16,274) (18,136)
Other income (expense), net 4,433
 (7,862) 3,565
 1,197
 (1,797)
Total other expense, net (11,215) (26,875) (15,048) (15,077) (19,933)
Income (loss) from continuing operations before taxes 52,491
 25,221
 (222,504) 59,157
 83,565
Income tax expense (benefit) 10,512
 11,277
 (51,999) 19,677
 21,670
Net income (loss) from continuing operations 41,979
 13,944
 (170,505) 39,480
 61,895
Income (loss) from discontinued operations, net of tax (236) (298) 388
 (1,863) (2,843)
Net income (loss) $41,743
 $13,646
 $(170,117) $37,617
 $59,052

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Consolidated Statements of Operations
(in thousands, except per share data):
 Year Ended December 31,
 2019 2018 2017 2016 2015
Net earnings (loss) per basic share:          
Net income (loss) from continuing operations $1.91
 $0.64
 $(7.95) $1.87
 $2.80
Income (loss) from discontinued operations, net of tax (0.01) (0.01) 0.02
 (0.09) (0.13)
Net income (loss) $1.90
 $0.63
 $(7.93) $1.78
 $2.67
Net earnings (loss) per diluted share:          
Net income (loss) from continuing operations $1.87
 $0.63
 $(7.95) $1.84
 $2.74
Income (loss) from discontinued operations, net of tax (0.02) (0.01) 0.02
 (0.08) (0.13)
Net income (loss) $1.85
 $0.62
 $(7.93) $1.76
 $2.61
Weighted average shares used in calculating net earnings (loss) per share:          
Basic 21,993
 21,706
 21,439
 21,084
 22,136
Diluted 22,507
 22,058
 21,439
 21,424
 22,600
Consolidated Balance Sheet Data
(in thousands):
 As of December 31,
 2019 2018 2017 2016 2015
Cash and cash equivalents $11,604
 $33,107
 $16,909
 $17,027
 $58,437
Working capital (2)
 $20,192
 $(185,374) $51,828
 $44,314
 $96,966
Total assets $1,104,271
 $1,049,532
 $1,036,928
 $1,153,215
 $1,159,543
Long-term debt, net of current portion (2)
 $208,324
 $53,853
 $342,507
 $292,065
 $307,376
Total stockholders’ equity (3)
 $585,465
 $540,624
 $503,316
 $648,033
 $652,325
(1)Intangible asset amortization relating to customer contracts, certain client relationships, and software and amortization of software development costs are presented as a component of total direct costs. Depreciation and intangible assets amortization not classified as direct costs are presented as a component of operating expenses.
(2)
Our Convertible Notes with a principal amount of $250.0 million were classified as short-term debt on our consolidated balance sheet at December 31, 2018 as they had a maturity date of October 1, 2019. Upon maturity, we refinanced the outstanding notes with the borrowing capacity available under our revolving credit facility, which is classified as long-term debt on our consolidated balance sheet. Refer to the "Liquidity and Capital Resources" section under Part II—Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations"and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for more information on our outstanding borrowings.
(3)We have not declared or paid dividends on our common stock in the periods presented above. See Item 5. "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividends."
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management's Discussion and Analysis of Financial Condition and Results of Operations ("(“MD&A"&A”) should be read in conjunction with the information under Part II—Item 6. "Selected Financial Data," and our Consolidated Financial Statements and related notes appearing under Part II—Item 8. "Financial“Financial Statements and Supplementary Data."” The following MD&A contains forward-looking statements and involves numerous risks and uncertainties, including, without limitation, those described under Part I—Item 1A. "Risk Factors"“Risk Factors” and "Forward-Looking Statements"“Forward-Looking Statements” of this Annual Report on Form 10-K. Actual results may differ materially from those contained in any forward-looking statements.
The following information summarizes our results of operations for 2019, 2018,2022, 2021, and 2017;2020; and discusses those results of operations for 20192022 compared to 2018.2021. Additionally, as a result of our operating segment modification effective January 1, 2022, the following MD&A discusses the segment revenue and operating income for 2021 compared to 2020. For a discussion of our consolidated results of operations for 20182021 compared to 2017,2020, which were not impacted by the operating segment modification, refer to Part II—Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report on Form 10-K for the year ended December 31, 2018,2021, which was filed with the United States Securities and Exchange Commission on February 27, 2019.24, 2022.
OVERVIEW
Huron is a global consultancyprofessional services firm that collaboratespartners with clients to drive strategicdevelop growth ignite innovationstrategies, optimize operations and navigate constant change. Through a combinationaccelerate digital transformation using an enterprise portfolio of strategy, expertisetechnology, data and creativity, we helpanalytics solutions to empower clients accelerate operational, digital and cultural transformation, enabling the change they need to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.

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We provide our services and manage our business under three operating segments: Healthcare, Business Advisory,Education and Education.Commercial. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. See Part I—Item 1. "Business—“Business—Overview—Our Services” and Note 19 “Segment Information” within the notes to our consolidated financial statements for a discussion of our three segments.segments and capabilities, as well as information on the modification to our reportable segments effective January 1, 2022. As a result of the modification, we recast our historical segment information for consistent presentation. Our historical consolidated results have not been impacted.
How We Generate
COMPONENTS OF OPERATING RESULTS
Revenues
A large portion of ourOur revenues isare primarily generated by our full-time consultantsemployees who provide consulting and other professional services to our clients and are billable to our clients based on the number of hours worked. A smaller portion of our revenues is generated by our other professionals, also referred to as full-time equivalents, some of whom work variable schedules as needed by our clients. Full-time equivalent professionals consist of our coaches and their support staff from our Culture and Organizational Excellence solution, consultants who work variable schedules as needed by our clients, employees who provide managedworked, services in our Healthcare segment, and our employees who provide software support and maintenance services to our clients. We translate the hours that these other professionals work on client engagements into a full-time equivalent measure that we use to manage our business.provided, or achieved outcomes. We refer to these employees as our full-time consultants and other professionals collectively as revenue-generating professionals.
Revenues generated by our full-time consultants are primarily driven by the number of consultantsrevenue-generating professionals we employ and their utilization rates, as well as the billing rates we charge our clients. Revenues generated by our other professionals, or full-time equivalents, are largely dependent on the number of consultants we employ, their hours worked, and billing rates charged. Revenues generated by our coaches are largely dependent on the number of coaches we employ and the total value, scope, and terms of the consulting contracts under which they provide services, which are primarily fixed-fee contracts. Revenues generated byservices. We also engage independent contractors to supplement our Managed Services solution are dependentrevenue-generating professionals on the total value, scope and terms of the related contracts.client engagements as needed.
We generate our revenues from providing professional services and software products under the following four types of billing arrangements: fixed-fee (including software license revenue); time-and-expense; performance-based; and software support, maintenance and subscriptions.
•Fixed-fee (including software license revenue): In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. It is the client’s expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances. We generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Contracts within our Culture and Organizational Excellence solution include fixed-fee partner contracts with multiple performance obligations, which primarily consist of coaching services, as well as speaking engagements, conferences, publications and software products (“Partner Contracts”). Revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract. All other revenues under Partner Contracts, including speaking engagements, conferences and publications, are recognized at the time the goods or services are provided.
Fixed-fee arrangements also include software licenses for our revenue cycle management software and research administration and compliance software. Licenses for our revenue cycle management software are sold only as a component of our consulting projects, and the services we provide are essential to the functionality of the software. Therefore, revenues from these software licenses are recognized over the term of the related consulting services contract. License revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered.
Fixed-fee engagements represented 45.8%, 47.4%, and 46.7% of our revenues for the years ended December 31, 2019, 2018, and 2017, respectively.
Time-and-expense•Time-and-expense: Under time-and-expense billing arrangements, we require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences and publications purchased by our clients outside of Partner Contracts within our Culture and Organizational Excellence solution. We recognize revenues under time-and-expense billing arrangements as the related services or publications are provided. Time-and-expense engagements represented 39.9%, 41.2%, and 43.0% of our revenues in 2019, 2018, and 2017, respectively.clients.
•Performance-based: In performance-based fee billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur. Often, performance-based fees supplement our time-and-expense or fixed-fee engagements. Effective January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, on a modified retrospective basis and began recognizing revenues under performance-based billing arrangements by estimating the amount of variable consideration that is probable of being earned and recognizing that estimate over the length of the contract using a proportionate performance approach. Prior to adopting ASC 606 in 2018, we recognized revenues under performance-based billing arrangements when all related performance criteria were met. Performance-based fee revenues represented 8.9%, 6.1%, and 4.9% of our revenues in 2019, 2018, and 2017, respectively. The level of performance-based fees earned may vary based on our clients’ risk sharing preferences and the mix of services we provide.

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Software support, maintenance and subscriptions: Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance. We also generate subscription revenue from our cloud-based analytic tools and solutions. Software support, maintenance and subscription revenues are recognized ratably over the support or subscription period. These fees are generally billed in advance and included in deferred revenues until recognized. Software support
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Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods. Unexpected changes in the demand for our services can result in significant variations in utilization and maintenancerevenues and subscription-based revenues represented 5.4%, 5.3%,present a challenge to optimal hiring and 5.4%staffing. Moreover, our clients typically retain us on an engagement-by-engagement basis, rather than under long-term recurring contracts. The volume of our revenues in 2019, 2018, and 2017, respectively.work performed for any particular client can vary widely from period to period.
Our quarterly results are impacted principally by the total value, scope, and terms of our full-time consultants’ utilization rate, the bill rates we charge our clients, andclient contracts, the number of our revenue-generating professionals who are available to work.work, our revenue-generating professionals' utilization rate, and the bill rates we charge our clients. Our utilization rate can be negatively affected by increased hiring because there is generally a transition period for new professionals that results in a temporary drop in our utilization rate. Our utilization rate can also be affected by seasonal variations in the demand for our services from our clients. For example, during the third and fourth quarters of the year, vacations taken by our clients can result in the deferral of activity on existing and new engagements, which would negatively affect our utilization rate. The number of business work days is also affected by the number of vacation days taken by our consultants and holidays in each quarter. We typically have fewer business work days available in the fourth quarter of the year, which can impact revenues during that period.
Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods. Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal hiring and staffing. Moreover, our clients typically retain us on an engagement-by-engagement basis, rather than under long-term recurring contracts. The volume of work performed for any particular client can vary widely from period to period.
Reimbursable Expenses
Reimbursable expenses that are billed to clients, primarily relating to travel and out-of-pocket expenses incurred in connection with client engagements, are included in total revenues and reimbursable expenses. Under fixed-fee billing arrangements, we estimate the total amount of reimbursable expenses to be incurred over the course of the engagement and recognize the estimated amount as revenue using the proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Under time-and-expense billing arrangements, we recognize reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Subcontractors that are billed to clients at cost are also included in reimbursable expenses. When billings do not specifically identify reimbursable expenses, we allocate the portion of the billings equivalent to these expenses to reimbursable expenses.
We manage our business on the basis of revenues before reimbursable expenses, which we believe is the most accurate reflection of our services because it eliminates the effect of reimbursable expenses that we bill to our clients at cost.
Total Direct CostsOperating Expenses
Our most significant expenses are costs classified as total direct costs. These total directDirect costs primarily includeconsist of payroll costs for our revenue-generating professionals, which includes salaries, performance bonuses, share-based compensation, signing and retention bonuses, payroll taxes and benefits for revenue-generating professionals, as well as commissions, technologybenefits. Direct costs product and event costs, andalso include fees paid to independent contractors that we retain to supplement our revenue-generating professionals, typically on an as-needed basis for specific client engagements.engagements, and technology costs, product and event costs, and commissions. Direct costs also include share-based compensation, which represents the cost of restricted stock and performance-based share awards granted to our revenue-generating professionals. Compensation expense for restricted stock awards and performance-based share awards is recognized ratably using either the straight-line attribution method or the graded vesting attribution method, as appropriate, over the requisite service period, which is generally three to four years. Total direct costs also includeexclude amortization of intangible assets primarily relating to certain customer relationships, technology and software development costs and customer contracts acquiredreimbursable expenses, both of which are separately presented in business combinations, and internally developed software costs.our consolidated statements of operations.
Operating Expenses and Other Losses (Gains), Net
Our operating expenses include selling,Selling, general and administrative expenses which consist primarily of salaries, performance bonuses, share-based compensation, payroll taxes benefits, and share-based compensationbenefits for our support personnel. Also included in selling, general and administrative expenses is third-party professional fees, software licenses and data hosting expenses, rent and other office related expenses, sales and marketing related expenses, professional fees, recruiting and training expenses, and practice administration and meetings expenses.
Other operating expenses include restructuring charges, other gainsdepreciation expense, amortization expense related to internally developed software costs and losses,amortization of intangible assets acquired in business combinations. In the first quarter of 2022, we began presenting depreciation and certain amortization expenses not includedexpense in the aggregate with amortization of intangible assets and software development costs that were previously presented separately within total direct costs.costs and reimbursable expenses. We have recast our historical presentation of our consolidated statement of operations for consistent presentation.
Segment Results
Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue and selling, general and administrativeoperating expenses that are incurred directly by the segment. Unallocated costsOther operating expenses not allocated at the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs

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include corporate office support costs, office facility costs, costs relatingrelated to accounting and finance, human resources, legal, marketing, information technology, and company-wide business development functions, as well asand costs related to overall corporate management.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected segment and consolidated operating results and other operating data. The results of operations for acquired businesses have been included in our results of operations since the date of their respective acquisition.
 Year Ended December 31,
 2019 2018 2017
Segment and Consolidated Operating Results (in thousands):     
Healthcare:     
Revenues$399,221
 $364,763
 $356,909
Operating income$125,724
 $108,060
 $118,761
Segment operating income as a percentage of segment revenues31.5% 29.6% 33.3%
Business Advisory:     
Revenues$252,508
 $236,185
 $207,753
Operating income$49,695
 $50,625
 $46,600
Segment operating income as a percentage of segment revenues19.7% 21.4% 22.4%
Education:     
Revenues$225,028
 $194,177
 $167,908
Operating income$55,741
 $48,243
 $40,318
Segment operating income as a percentage of segment revenues24.8% 24.8% 24.0%
Total Company:     
Revenues$876,757
 $795,125
 $732,570
Reimbursable expenses88,717
 82,874
 75,175
Total revenues and reimbursable expenses$965,474
 $877,999
 $807,745
Statements of Operations reconciliation:     
Segment operating income$231,160
 $206,928
 $205,679
Items not allocated at the segment level:     
Other operating expenses140,285
 122,276
 120,718
Litigation and other losses (gains), net(1,196) (2,019) 1,111
Depreciation and amortization28,365
 34,575
 38,213
Goodwill impairment charges (1)
—
 —
 253,093
Total operating income (loss)63,706
 52,096
 (207,456)
Other expense, net11,215
 26,875
 15,048
Income (loss) from continuing operations before taxes52,491
 25,221
 (222,504)
Income tax expense (benefit)10,512
 11,277
 (51,999)
Net income (loss) from continuing operations$41,979
 $13,944
 $(170,505)
Earnings (loss) per share from continuing operations     
Basic$1.91
 $0.64
 $(7.95)
Diluted$1.87
 $0.63
 $(7.95)

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 Year Ended December 31,
 2019 2018 2017
Other Operating Data:     
Number of full-time billable consultants (at period end) (2):
     
Healthcare890
 813
 778
Business Advisory930
 813
 809
Education756
 621
 549
Total2,576
 2,247
 2,136
Average number of full-time billable consultants (for the period) (2):
     
Healthcare849
 807
 796
Business Advisory892
 769
 740
Education686
 589
 509
Total2,427
 2,165
 2,045
Full-time billable consultant utilization rate (3):
     
Healthcare79.4% 81.7% 78.4%
Business Advisory72.5% 73.8% 71.5%
Education76.8% 76.6% 72.8%
Total76.1% 77.5% 74.5%
Full-time billable consultant average billing rate per hour (4):
     
Healthcare$231
 $209
 $206
Business Advisory (5)
$201
 $215
 $205
Education$199
 $202
 $213
Total (5)
$211
 $209
 $207
Revenue per full-time billable consultant (in thousands):     
Healthcare$331
 $307
 $295
Business Advisory$273
 $293
 $268
Education$285
 $289
 $291
Total$297
 $297
 $284
Average number of full-time equivalents (for the period) (6):
     
Healthcare244
 219
 213
Business Advisory14
 22
 20
Education47
 39
 35
Total305
 280
 268
Revenue per full-time equivalent (in thousands):     
Healthcare$485
 $536
 $576
Business Advisory$655
 $484
 $464
Education$617
 $601
 $564
Total$513
 $541
 $566
(1)The non-cash goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance.
(2)Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked.
(3)Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all of our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days.
(4)Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period.
(5)The Business Advisory segment includes operations of Huron Eurasia India. Absent the impact of Huron Eurasia India, the average billing rate per hour for the Business Advisory segment would have been $228, $246, and $233 for the years ended December 31, 2019, 2018 and 2017, respectively.
Absent the impact of Huron Eurasia India, Huron's consolidated average billing rate per hour would have been $220, $218, and $216 for the years ended December 31, 2019, 2018 and 2017, respectively.
(6)Consists of coaches and their support staff within our Culture and Organizational Excellence solution, consultants who work variable schedules as needed by our clients, employees who provide managed services in our Healthcare segment, and full-time employees who provide software support and maintenance services to our clients.

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Non-GAAP Measures
We also assess our results of operations using certainthe following non-GAAP financial measures. These non-GAAP financial measures differ from GAAP because the non-GAAP financial measures we calculate to measuremeasures: earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA"(“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share ("EPS") from continuing operationsoperations. These non-GAAP financial measures differ from GAAP because they exclude a number of items required by GAAP, each discussed below. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows, or liquidity prepared in accordance with GAAP. Our non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar terms used by other companies, and accordingly, care should be exercised in understanding how we define our non-GAAP financial measures.
Our management uses the non-GAAP financial measures to gain an understanding of our comparative operating performance, for example when comparing such results with previous periods or forecasts. These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for
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meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results.
The reconciliations of these financial measures from GAAP to non-GAAP are as follows (in thousands, except per share amounts): 
 Year Ended December 31,
 2019 2018 2017
Revenues$876,757
 $795,125
 $732,570
Net income (loss) from continuing operations$41,979
 $13,944
 $(170,505)
Add back:     
Income tax expense (benefit)10,512
 11,277
 (51,999)
Interest expense, net of interest income15,648
 19,013
 18,613
Depreciation and amortization33,740
 38,822
 49,145
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA)101,879
 83,056
 (154,746)
Add back:     
Restructuring charges1,855
 3,657
 6,246
Litigation and other losses (gains), net(1,196) (2,019) 1,111
Transaction-related expenses2,680
 —
 —
Goodwill impairment charges—
 —
 253,093
Other non-operating expense (income), net—
 5,807
 (696)
Foreign currency transaction losses (gains), net160
 475
 (434)
Adjusted EBITDA$105,378
 $90,976
 $104,574
Adjusted EBITDA as a percentage of revenues12.0% 11.4% 14.3%

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 Year Ended December 31,
 2019 2018 2017
Net income (loss) from continuing operations$41,979
 $13,944
 $(170,505)
Weighted average shares - diluted22,507
 22,058
 21,439
Diluted earnings (loss) per share from continuing operations$1.87
 $0.63
 $(7.95)
Add back:     
Amortization of intangible assets17,793
 23,955
 35,027
Restructuring charges1,855
 3,657
 6,246
Litigation and other losses (gains), net(1,196) (2,019) 1,111
Transaction-related expenses2,680
 —
 —
Goodwill impairment charges—
 —
 253,093
Non-cash interest on convertible notes6,436
 8,232
 7,851
Other non-operating expense (income), net—
 5,807
 (696)
Tax effect of adjustments(7,200) (9,487) (91,557)
Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017—
 1,749
 8,762
Tax benefit related to "check-the-box" election(736) —
 (2,728)
Total adjustments, net of tax19,632
 31,894
 217,109
Adjusted net income from continuing operations$61,611
 $45,838
 $46,604
Adjusted weighted average shares - diluted22,507
 22,058
 21,627
Adjusted diluted earnings per share from continuing operations$2.74
 $2.08
 $2.15
These non-GAAP financial measures include adjustments for the following items:
Amortization of intangible assets: We have excludedexclude the effect of amortization of intangible assets from the calculation of adjusted net income, from continuing operations presented above. Amortization of intangiblesas it is inconsistent in its amount and frequency and is significantly affected by the timing and size of our acquisitions.
Restructuring and other charges: We have incurred charges due to the restructuring of various parts of our business. Thesebusiness, including restructuring charges haverelated to the sale of the Life Sciences business in the fourth quarter of 2021 and the restructuring plan announced in the fourth quarter of 2020 to reduce operating costs to address the impact of the COVID-19 pandemic on our business. Restructuring charges primarily consistedconsist of costs associated with office space consolidations, including lease impairment charges and accelerated depreciation on lease-related property and equipment, and severanceemployee-related charges. WeAdditionally, we have excluded the effect of a $0.8 million one-time charge incurred during the first quarter of 2020 related to redundant administrative costs in our corporate operations which is recorded within selling, general and administrative expenses on our consolidated statement of operations. We exclude the effect of the restructuring and other charges from our non-GAAP measures because the amount of each restructuring charge is significantly affected by the timing and size of the restructured business or component of a business.
Litigation and other losses (gains), net: We have excluded the effects of litigation and other losses (gains), net which primarily consist of net remeasurement losses and gains related to contingent acquisition liabilities and litigation settlement losses and gains to permit comparability with periods that were not impacted by these items.
Other losses (gains): We exclude the effects of other losses (gains), which primarily relate to changes in the estimated fair value of our liabilities for contingent consideration related to business acquisitions and litigation settlement losses and gains, to permit comparability with periods that are not impacted by these items.
Transaction-related expenses: expenses: To permit comparability with prior periods, we excludedexclude the impact of transaction-related expenses for acquisitions, whether or not ultimately consummated, and which primarily relate to third-party legal and accounting fees. The transaction-related expensesfees incurred in 2019 primarily related to the evaluation of a potential acquisition that ultimately did not consummate.business acquisitions.
Goodwill impairment charges: We have excludedexclude the effect of the goodwill impairment charges that occurred in 2017 as these are infrequent events and their exclusion permits comparability with periods that were not impacted by such charges.
Non-cash interestUnrealized gain on convertible notes:preferred stock investment: We incurred non-cash interest expense relatingexclude the effect of unrealized gains related to changes in the impliedfair value of the equity conversionour preferred stock investment in Medically Home Group, Inc. (“Medically Home”), which are recognized when an observable price change occurs. These unrealized gains are included as a component of our Convertible Notes. The value of the equity conversion component was treated as a debt discount and amortized to interest expense over the life of the Convertible Notes using the effective interest rate method.other income (expense), net. We exclude this non-cash interest expensebelieve that does not represent cash interest payments from the calculation of adjusted net income from continuing operations as management believes that this non-cash expense isthese unrealized gains are not indicative of the ongoing performance of our business.business and their exclusion permits comparability with prior periods.
Other non-operating expense (income), net:Losses (gains) on sales of businesses: We have excludedexclude the effectseffect of other non-operating incomelosses and expense itemsgains recognized as a result of sales of businesses as they are infrequent, management believes that these items are not indicative of the ongoing performance of our business, and their exclusion permits comparability with periods that were not impacted by such items. The other non-operating expense for 2018 consists of the loss on the sale of the Middle East practice within the Business Advisory segment in 2018. The other non-operating income for 2017 is primarily attributable2021 gain relates to a $0.9 million gain on the sale of our Life Sciences C&Obusiness in the fourth quarter of 2021, and the 2020 loss primarily relates to the sale of our U.K. life sciences drug safety practice partially offset by a $0.3 million remeasurement loss recorded on a promissory note that was amended in 2017.

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Foreign currency transaction losses (gains), net: We have excludedexclude the effect of foreign currency transaction losses and gains from the calculation of adjusted EBITDA because the amount of each loss or gain is significantly affected by timing and changes in foreign exchange rates.
Tax effect of adjustments: The non-GAAP income tax adjustment reflects the incremental tax impact applicable to the non-GAAP adjustments.
Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017 ("2017 Tax Reform"): We have excluded the impact of the 2017 Tax Reform, which was enacted in the fourth quarter of 2017. The net tax expense recorded in 2018 was due to a valuation allowance for foreign tax credits and an adjustment to our withholding tax on outside basis differences due to our change in assertion for permanent reinvestment, which were partially offset by U.S. federal return to provision adjustments related to 2017 Tax Reform items on our 2017 corporate tax return. The tax expense for 2017 was primarily due to the remeasurement of net deferred tax balances at the lower federal income tax rate, additional one-time income tax expense related to the transition tax on accumulated foreign earnings, and withholding tax on outside basis differences due to our change in assertion for permanent reinvestment. The exclusion of the 2017 Tax Reform permits comparability with periods that were not impacted by this item.
Tax benefit related to "check-the-box" election: We have excluded the positive impacts of tax benefits related to our "check-the-box" elections. The tax benefit recorded in 2019 was the result of recognizing a previously unrecognized tax benefit due to the expiration of statute of limitations on our "check-the-box" election made in 2015 to treat certain wholly-owned foreign subsidiaries as disregarded entities for U.S. federal income tax purposes. The tax benefit recorded in 2017 was the result of recognizing a previously unrecognized tax benefit from our "check-the-box" election made in 2014 to treat one of our wholly-owned foreign subsidiaries as a disregarded entity for U.S. federal income tax purposes. The exclusion of these discrete tax benefits permit comparability with periods that were not impacted by this item. Refer to Note 17 “Income Taxes” within the notes to the consolidated financial statements for additional information on our "check-the-box" elections.
Income tax expense, Interest expense, net of interest income, Depreciation and amortization:We have excludedexclude the effects of income tax expense, interest expense, net of interest income, and depreciation and amortization in the calculation of EBITDA, as these are customary exclusions as defined by the calculation of EBITDA to arrive at meaningful earnings from core operations excluding the effect of such items. We include, within the depreciation and amortization adjustment, the amortization of capitalized implementation costs of our enterprise resource planning ("ERP") and other related software, which is included within selling, general and administrative expenses on our consolidated statements of operations.
Adjusted weighted average shares - diluted: As we reported a net loss for the year ended December 31, 2017,2020, GAAP diluted weighted average shares outstanding equals the basic weighted average shares outstanding for that period. For the year ended December 31, 2017, 2020,
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the non-GAAP adjustments described above resulted in adjusted net income from continuing operations. Therefore, we includedinclude the dilutive common stock equivalents in the calculation of adjusted diluted weighted average shares outstanding for that period.
Revenue-Generating Professionals
Year EndedOur revenue-generating professionals consist of our full-time consultants who generate revenues based on the number of hours worked; full-time equivalents, which consists of coaches and their support staff within the Culture and Organizational excellence solution, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients; and our Healthcare Managed Services employees who provide revenue cycle billing, collections insurance verification and change integrity services to clients.
Utilization Rate
The utilization rate of our revenue-generating professionals is calculated by dividing the number of hours our billable consultants worked on client assignments during a period by the total available working hours for these billable consultants during the same period. Available hours are determined by the standard hours worked by each billable consultant, adjusted for part-time hours, and U.S. standard work weeks. Available working hours exclude local country holidays and vacation days. Utilization rates are presented for our revenue-generating professionals who primarily bill on an hourly basis. We do not present utilization rates for our Managed Services professionals as most of the revenues generated by these employees are not billed on an hourly basis.
RESULTS OF OPERATIONS
Executive Highlights
Highlights from the year ended December 31, 2019 Compared2022 include:
•Total revenues increased 25.0% to Year Ended$1.13 billion in 2022 from $905.6 million in 2021
•Revenues within our Digital capability increased 41.4% to $494.5 million in 2022 from $349.7 million 2021
•Operating margin increased to 8.8% for 2022, compared to 5.8% for 2021
•Diluted EPS from continuing operations increased 26.0% to $3.64 for 2022, compared to $2.89 for 2021
•Adjusted diluted EPS from continuing operations (a non-GAAP measure) increased 31.4% to $3.43 for 2022, compared to $2.61 for 2021
•Returned $121.3 million to shareholders by repurchasing 2.0 million shares of our common stock in 2022
•Refinanced our $600 million credit facility; including extending the maturity date to 2027 and transitioning to SOFR, while maintaining favorable pricing and flexibility
•Completed the acquisitions of AIMDATA, LLC and Customer Evolution, LLC in January 2022 and December 2022, respectively
Total revenues increased $226.8 million, or 25.0%, to $1.13 billion for the year ended December 31, 2018
Revenues
Revenues increased $81.6 million, or 10.3%, to $876.82022 from $905.6 million for the year ended December 31, 2019, from $795.12021. The increase in total revenues reflects continued strength in demand for our Digital capability services across all our segments as companies continue to invest in cloud-based technology and analytic solutions, as well as strengthened demand for our Consulting and Managed Services offerings within our Education and Healthcare segments.
In our Consulting and Managed Services capability, revenues for the year ended December 31, 2022 increased 14.8% to $638.0 million, compared to $555.9 million the year ended December 31, 2021, and reflected strengthened demand in our Education and Healthcare segments. The utilization rate within our Consulting capability increased to 75.2% in 2022, compared to 70.6% in 2021.
Revenues within our Digital capability increased 41.4% to $494.5 million for the year ended December 31, 2018. Of the overall $81.6 million increase in revenues, $76.9 million was driven by our full-time billable consultants and $4.7 million was driven by our full-time equivalents.
The increase in full-time billable consultant revenues was attributable to strengthened demand for services in all of our segments, as discussed below in Segment Results, and reflected an increase in the average number of full-time billable consultants in 20192022, compared to 2018.
The increase in full-time equivalent revenues was attributable to increases in full-time equivalent revenues in our Education and Healthcare segments, partially offset by a decrease in full-time equivalent revenues in our Business Advisory segment, as discussed below in Segment Results; and reflected an overall increase in the average number of full-time equivalents, partially offset by an overall decrease in revenue per full-time equivalent.
Total Direct Costs
Our total direct costs, including amortization of intangible assets and software development costs, increased $55.2 million, or 10.5%, to $581.0$349.7 million for the year ended December 31, 20192021, and reflected strengthened demand in all of our segments. The utilization rate within our Digital capability decreased to 71.0% in 2022, compared to 72.5% in 2021.
The total number of revenue-generating professionals increased to 4,832 as of December 31, 2022, compared to 3,776 as of December 31, 2021, as a result of hiring to support the overall increase in demand for our services within all of our segments. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services as compensation costs are the most significant portion of our operating expenses.
Operating margin, which is defined as operating income expressed as a percentage of revenues, increased to 8.8% for the year ended December 31, 2022, compared to 5.8% for the year ended December 31, 2021, driven by strong revenue growth that outpaced increases in operating expenses.
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Net income from $525.8continuing operations increased $12.6 million, or 19.9%, to $75.6 million for the year ended December 31, 2018.2022 from $63.0 million for the year ended December 31, 2021. As a result of the increase in net income from continuing operations, diluted earnings per share from continuing operations increased 26.0% to $3.64 for 2022 from $2.89 for 2021. Adjusted diluted earnings per share from continuing operations increased 31.4% to $3.43 for 2022 from $2.61 for 2021.
During 2022, we repurchased 2.0 million shares of our common stock for $121.3 million, representing 9.3% of our common stock outstanding as of December 31, 2021.
On November 15, 2022, we entered into an amended and restated credit agreement that, among other items, extends the maturity date of our credit facility from September 27, 2024 to November 15, 2027; maintains the aggregate revolving commitments of $600 million; maintains favorable pricing and flexibility to support our balanced approach to capital deployment; and provides flexibility to add pricing adjustments tied to the achievement of ESG key performance indicators.
During 2022, we completed the following acquisitions:
•AIMDATA, LLC - On January 18, 2022, we completed the acquisition of AIMDATA, LLC ("AIMDATA"), an advisory and implementation consulting services firm focused on strategy, technology and business transformation. The results of operations of AIMDATA are included within our consolidated financial statements as of the acquisition date and allocated among our three operating industries, which are our reportable segments, based on the engagements delivered by the business.
•Customer Evolution, LLC - Effective December 31, 2022, we completed the acquisition of Customer Evolution, LLC ("Customer Evolution"), a healthcare advisory and technology implementation consulting services firm. The results of operations of Customer Evolution are included in our consolidated financial statements and results of operations of our Healthcare segment from the date of acquisition.
The acquisitions of AIMDATA and Customer Evolution are not significant to our consolidated financial statements individually or in the aggregate as of and for the year ended December 31, 2022.

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Summary of Results
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. The new operating model strengthens Huron’s go-to-market strategy, drives efficiencies that support margin expansion, and positions the company to accelerate growth.
To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. These changes improve visibility into the core drivers of our business. While our consolidated results have not been impacted, our historical segment information has been recast for consistent presentation.
The following table sets forth, for the periods indicated, selected segment and consolidated operating results and other operating data, including non-GAAP measures. The results of operations for acquired businesses have been included in our results of operations since the date of their respective acquisition.
Segment and Consolidated Operating Results
(in thousands, except per share amounts):		Year Ended December 31,
202220212020
Healthcare:
Revenues$534,999 $444,767 $406,536 
Operating income$131,227 $118,324 $105,650 
Segment operating income as a percentage of segment revenues24.5 %26.6 %26.0 %
Education:
Revenues$359,835 $242,374 $223,325 
Operating income$78,924 $52,398 $45,780 
Segment operating income as a percentage of segment revenues21.9 %21.6 %20.5 %
Commercial:
Revenues$237,621 $218,499 $214,266 
Operating income$50,025 $34,296 $39,044 
Segment operating income as a percentage of segment revenues21.1 %15.7 %18.2 %
Total Huron:
Revenues$1,132,455 $905,640 $844,127 
Reimbursable expenses26,506 21,318 26,887 
Total revenues and reimbursable expenses$1,158,961 $926,958 $871,014 
Segment operating income$260,176 $205,018 $190,474 
Items not allocated at the segment level:
Other operating expenses140,145 131,545 135,105 
Depreciation and amortization20,271 20,634 24,405 
Goodwill impairment charges (1)
— — 59,816 
Operating income (loss)99,760 52,839 (28,852)
Other income (expense), net8,817 27,197 (5,021)
Income (loss) from continuing operations before taxes108,577 80,036 (33,873)
Income tax expense (benefit)33,025 17,049 (10,155)
Net income (loss) from continuing operations$75,552 $62,987 $(23,718)
Earnings (loss) per share from continuing operations
Basic$3.73 $2.94 $(1.08)
Diluted$3.64 $2.89 $(1.08)
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Segment and Consolidated Operating Results
(in thousands, except per share amounts):		Year Ended December 31,
202220212020
Other Operating Data:
Number of revenue-generating professionals by segment (at period end) (6):
Healthcare1,890 1,596 1,117 
Education1,579 1,050 873 
Commercial (2)
1,363 1,130 1,059 
Total4,832 3,776 3,049 
Revenue by capability:
Consulting and Managed Services (3)
$637,994 $555,915 $514,086 
Digital494,461 349,725 330,041 
Total$1,132,455 $905,640 $844,127 
Number of revenue-generating professionals by capability (at period end):
Consulting and Managed Services (4)
2,2941,8381,362
Digital2,5381,9381,687
Total4,8323,7763,049
Utilization rate by capability (5):
Consulting75.2%70.6%67.6%
Digital71.0%72.5%74.3%
(1)The non-cash goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance.
(2)The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education.
(3)Managed Services capability revenues within our Healthcare segment was $67.6 million, $47.7 million and $28.7 million for the years ended 2022, 2021 and 2020, respectively.
Managed Services capability revenues within our Education segment was $15.7 million, $9.1 million and $6.8 million for the years ended 2022, 2021 and 2020, respectively.
(4)The number of Managed Services revenue-generating professionals within our Healthcare segment as of December 31, 2022, 2021 and 2020, was 715, 509, and 96, respectively.
The number of Managed Services revenue-generating professionals within our Education segment as of December 31, 2022, 2021 and 2020, was 106, 72, and 49, respectively.
(5)Utilization rates are presented for our revenue-generating professionals who primarily bill on an hourly basis. We do not present utilization rates for our Managed Services professionals as most of the revenues generated by these employees are not billed on an hourly basis.
(6)During the first quarter of 2022, we reclassified certain Digital revenue-generating professionals within our Healthcare and Education segments to our Commercial segment as these professionals can provide services across all of our industries. This reclassification did not impact the total headcount within our Digital capability for any period. The prior period headcount has been revised for consistent presentation.
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Non-GAAP Measures
 Year Ended December 31,
 202220212020
Revenues$1,132,455 $905,640 $844,127 
Net income (loss) from continuing operations$75,552 $62,987 $(23,718)
Add back:
Income tax expense (benefit)33,025 17,049 (10,155)
Interest expense, net of interest income11,883 8,150 9,292 
Depreciation and amortization28,233 26,347 29,644 
Earnings before interest, taxes, depreciation and amortization (EBITDA)148,693 114,533 5,063 
Add back:
Restructuring charges9,909 12,401 21,374 
Other losses (gains)(193)198 (150)
Transaction-related expenses50 1,782 1,132 
Goodwill impairment charges— — 59,816 
Unrealized gain on preferred stock investment(26,964)— (1,667)
Losses (gains) on sales of businesses— (31,510)1,603 
Foreign currency transaction losses (gains), net(655)419 (31)
Adjusted EBITDA$130,840 $97,823 $87,140 
Adjusted EBITDA as a percentage of revenues11.6 %10.8 %10.3 %
 Year Ended December 31,
 202220212020
Net income (loss) from continuing operations$75,552 $62,987 $(23,718)
Weighted average shares - diluted20,746 21,809 21,882 
Diluted earnings (loss) per share from continuing operations$3.64 $2.89 $(1.08)
Add back:
Amortization of intangible assets11,198 9,251 12,696 
Restructuring charges9,909 12,401 21,374 
Other losses (gains)(193)198 (150)
Transaction-related expenses50 1,782 1,132 
Goodwill impairment charges— — 59,816 
Unrealized gain on preferred stock investment(26,964)— (1,667)
Losses (gains) on sales of businesses— (31,510)1,603 
Tax effect of adjustments1,590 1,742 (23,199)
Total adjustments, net of tax(4,410)(6,136)71,605 
Adjusted net income from continuing operations$71,142 $56,851 $47,887 
Adjusted weighted average shares - diluted20,746 21,809 22,299 
Adjusted diluted earnings per share from continuing operations$3.43 $2.61 $2.15 

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Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Revenues
Revenues by segment and capability for the years ended December 31, 2022 and 2021 were as follows:
Revenues (in thousands)Year Ended
December 31,		Increase / (Decrease)
20222021$%
Segment:
Healthcare$534,999 $444,767 $90,232 20.3 %
Education359,835 242,374 117,461 48.5 %
Commercial237,621 218,499 19,122 8.8 %
Total revenues$1,132,455 $905,640 $226,815 25.0 %
Capability:
Consulting and Managed Services$637,994 $555,915 $82,079 14.8 %
Digital494,461 349,725 144,736 41.4 %
Total revenues$1,132,455 $905,640 $226,815 25.0 %
Total revenues increased $226.8 million, or 25.0%, to $1.13 billion for the year ended December 31, 2022 from $905.6 million for the year ended December 31, 2021. The overall $55.2increase in revenues reflects continued strength in demand for our Digital capability services across all our segments as companies continue to invest in cloud-based technology and analytic solutions, as well as strengthened demand for our Consulting and Managed Services offerings within our Education and Healthcare segments partially the result of a favorable comparison against Education's results in the first two quarters of 2021 which were more significantly impacted by the COVID-19 pandemic. During 2020 and 2021, some clients reprioritized and delayed certain projects as a result of the uncertainties surrounding the pandemic. Additional information on our revenues by segment follows.
•Healthcare revenues increased $90.2 million, or 20.3%, driven by strengthened demand for our technology and analytics services and software products within our Digital capability, as well as strengthened demand for our revenue cycle managed services and performance improvement solutions within our Consulting and Managed Services capability. Revenues for the year ended December 31, 2022 included $6.0 million of incremental revenues from our acquisition of Perception Health, Inc., which was completed in December 2021.
The number of revenue-generating professionals within our Healthcare segment grew 18.4% to 1,890 as of December 31, 2022, compared to 1,596 as of December 31, 2021.
•Education revenues increased $117.5 million, or 48.5%, driven by strengthened demand across all of our services and products within our Consulting and Managed Services and Digital capabilities. Revenues for the year ended December 31, 2022 included $8.2 million of incremental revenues from our acquisition of Whiteboard Communications Ltd., which was completed in December 2021.
The number of revenue-generating professionals within our Education segment grew 50.4% to 1,579 as of December 31, 2022, compared to 1,050 as of December 31, 2021.
•Commercial revenues increased $19.1 million, or 8.8%, driven by strengthened demand for our technology and analytics services within our Digital capability and our corporate finance advisory solution within our Consulting and Managed Services capability, partially offset by a decrease in revenues due to the divestiture of our Life Sciences business in the fourth quarter of 2021 and a decrease in demand for our financial advisory solutions within the Consulting and Managed Services capability. The Life Sciences business generated $16.7 million of revenues in the first ten months of 2021. Revenues for the year ended December 31, 2022 included $3.0 million of incremental revenues from our acquisitions of AIMDATA, LLC and Unico Solution, Inc., which were completed in January 2022 and February 2021, respectively. Excluding the revenue generated by Life Sciences in 2021 and the acquisitions of AIMDATA and Unico Solutions in 2022, Commercial revenues increased $32.9 million, or 16.3%.
The number of revenue-generating professionals within our Commercial segment grew 20.6% to 1,363 as of December 31, 2022, compared to 1,130 as of December 31, 2021. This increase includes the impact of the divestiture of our Life Sciences business completed in the fourth quarter of 2021. The Life Sciences business employed approximately 65 revenue-generating professionals prior to the divestiture.
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Operating Expenses
Operating expenses for the year ended December 31, 2022 increased $185.1 million, or 21.2%, over the year ended December 31, 2021.
Operating expenses and operating expenses as a percentage of revenues were as follows:
Operating Expenses (in thousands, except amounts as a percentage of revenues)Year Ended December 31,Increase / (Decrease)
20222021
Direct costs$785,881 69.4%$636,776 70.3%$149,105 
Reimbursable expenses26,671 2.4%21,369 2.4%5,302 
Selling, general and administrative expenses209,381 18.5%178,084 19.7%31,297 
Restructuring charges9,909 0.9%12,401 1.4%(2,492)
Depreciation and amortization27,359 2.3%25,489 2.7%1,870 
Total operating expenses$1,059,201 93.5%$874,119 96.5%$185,082 
Direct Costs
Direct costs increased $149.1 million, or 23.4%, to $785.9 million for the year ended December 31, 2022 from $636.8 million for the year ended December 31, 2021. The $149.1 million increase primarily related to an $113.9 million increase in compensation costs for our revenue-generating professionals, driven by increased headcount, annual salary increases that went into effect in the first quarter of 2022, and increases in performance bonus expense and share-based compensation expense. Additional increases in direct costs include a $26.2 million increase in contractor expense, a $5.7 million increase in technology costs, and a $2.5 million increase in product and event costs. As a percentage of revenues, direct costs decreased to 69.4% during 2022, compared to 70.3% during 2021, primarily due to revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals, partially offset by the increase in contractor expense, as a percentage of revenues.
Reimbursable Expenses
Reimbursable expenses are billed to clients at cost and primarily relate to travel and out-of-pocket expenses incurred in connection with client engagements. These expenses are also included in total revenues and reimbursable expenses. We manage our business on the basis of revenues before reimbursable expenses, which we believe is the most accurate reflection of our services because it eliminates the effect of reimbursable expenses that are also included as a component of operating expenses.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $31.3 million, or 17.6%, to $209.4 million for the year ended December 31, 2022 from $178.1 million for the year ended December 31, 2021. The $31.3 million increase primarily related to a $32.2$21.0 million increase in non-payroll costs including a $7.0 million increase in promotion and marketing expenses, a $5.2 million increase in practice administration and meetings expenses, a $4.6 million increase in software and data hosting expenses, a $2.3 million increase in training expenses, and a $1.3 million increase in third-party professional fees; partially offset by a $2.0 million decrease in legal expenses. Additionally, selling, general and administrative expenses increased by $10.3 million related to compensation costs for our support personnel, which includes an $11.3 million increase in salaries and related expenses, for our revenue-generating professionals, which was largely driven by increased headcount in all of our segments; a $15.7$6.3 million increase in performance bonus expense for our revenue-generating professionals; a $3.2 million increase in contractor expense; and a $2.3$3.4 million increase in share-based compensation expense; partially offset by an $11.7 million decrease in deferred compensation expense attributable to the change in the market value of our deferred compensation liability. The decrease in deferred compensation expense is offset by a decrease in the gain recognized for the change in the market value of investments that are used to fund our revenue-generating professionals.deferred compensation liability and recognized in other income (expense), net. As a percentage of revenues, our total direct costs increasedselling, general and administrative expenses decreased to 66.3%18.5% during 20192022, compared to 66.1%19.7% during 2018,2021. This decrease was primarily due to the increasedecrease in performance bonusdeferred compensation expense forattributable to the change in the market value of our revenue-generating professionals as a percentage of revenues, largely offset bydeferred compensation liability and revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals.

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Total direct costs for the year ended December 31, 2019 included $5.4 million of amortization expense for internal software development costs and intangible assets, compared to $4.2 million of amortization expense in 2018. The $1.1 million increase in amortization expense was primarily attributable to a $1.4 million increase in amortization of internal software development costs,support personnel, partially offset by a $0.2 million decrease in intangible asset amortization attributable to certain intangible assets acquired in our Studer Group acquisition which were fully amortized in prior periods. Intangible asset amortization included within direct costs for the years ended December 31, 2019 and 2018 related to technology and software, certain customer relationships, publishing content and customer contracts acquired in connection with our business acquisitions. See Note 3 "Acquisitions" and Note 4 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information about our intangible assets.
Operating Expenses and Other Losses (Gains), Net
Selling, general and administrative expenses increased $22.1 million, or 12.2%, to $203.1 million for the year ended December 31, 2019, compared to $181.0 million for the year ended December 31, 2018. The overall increase of $22.1 million was primarily related to a $10.9 million increase in salaries and related expenses for our support personnel; a $4.5 million increase in data hosting and software related expenses; a $2.7 million increase in share-based compensation expense for our support personnel; a $2.4 million increase in legal expenses; a $1.7 million increase in performance bonus expense for our support personnel; and a $1.3 million increaseincreases in promotion and marketing expenses. These increases were partially offset by a $2.2 million decrease in facilities expense. The increases in share-based compensation expenseexpenses and performance bonus expense for our support personnel were largely driven by overall improved company-wide performance. The increase in legalpractice administration and meetings expenses, was primarily due to third-party transaction-related expenses related to the evaluationas percentages of a potential acquisition that ultimately did not consummate. As a percentage of revenues, selling, general and administrative expenses increased to 23.2% during 2019 compared to 22.8% during 2018, primarily due to the items described above.revenue.
Restructuring Charges
Restructuring charges for the year ended December 31, 2019 totaled $1.92022 were $9.9 million, compared to $3.7$12.4 million for the year ended December 31, 2018. During 2019, we exited a portion2021. The $9.9 million of restructuring charges incurred in 2022 included $5.7 million of employee-related expenses; $2.3 million for rent and related expenses, net of sublease income, for previously vacated office spaces; $0.7 million for third-party professional advisory fees related to the modification of our Lake Oswego, Oregon office resultingoperating model; and $0.6 million for the early termination of a contract.
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Of the $12.4 million of restructuring charges incurred in a $0.72021, $8.5 million lease impairmentwas in connection with the sale of our Life Sciences business in the fourth quarter of 2021. The $8.5 million charge related to the sale consisted of $6.8 million of transaction-related employee payments; $0.9 million of third-party legal and professional advisory fees; and $0.8 million of accelerated amortization and depreciation on the related operating lease right-of-use (“ROU”) asset and leasehold improvementsfixed assets related to our London, U.K. office space, which we vacated as a result of the divestiture. Additionally, in 2021, we incurred $2.3 million of rent and $0.2 millionrelated expenses, net of sublease income, and accelerated depreciation on furniture and fixtures for other previously vacated office spaces, and $1.3 million of other employee-related expenses.
Depreciation and Amortization
Depreciation and amortization expense, which includes amortization of intangible assets and software development costs previously presented separately, increased $1.9 million, or 7.3%, to $27.4 million for the year ended December 31, 2022, compared to $25.5 million for the year ended December 31, 2021. The $1.9 million increase in depreciation and amortization expense was primarily attributable to an increase in amortization of intangible assets acquired in business acquisitions completed in the fourth quarter quarter of 2021 and in 2022, partially offset by decreasing amortization expense for certain intangible assets acquired due to the accelerated basis of amortization in prior periods.
Operating Income and Operating Margin
Operating income increased $46.9 million to $99.8 million for the year ended December 31, 2022 from $52.8 million for the year ended December 31, 2021. Operating margin, which is defined as operating income expressed as a percentage of revenues, increased to 8.8% for 2022, compared to 5.8% for 2021.
Operating income and operating margin for each of our segments is as follows. See the Segment and Consolidated Operating Results table above for a reconciliation of our total segment operating income to consolidated Huron operating income.
Segment Operating Income (in thousands, except operating margin percentages)Year Ended December 31,Increase / (Decrease)
20222021
Healthcare$131,227 24.5%$118,324 26.6%$12,903 
Education78,924 21.9%52,398 21.6%26,526 
Commercial50,025 21.1%34,296 15.7%15,729 
Total segment operating income$260,176 $205,018 $55,158 
•Healthcare operating income increased primarily due to the increase in revenues, partially offset by increases in compensation costs for our revenue-generating professionals, contractor expenses, practice administration and meetings expenses, compensation costs for our support personnel, amortization of intangible assets, and technology expenses. The increase in compensation costs for our revenue-generating professionals was driven by an increase in headcount and annual salary increases that office.went into effect in the first quarter of 2022, as well as increases in performance bonus expense and share-based compensation expense; partially offset by a decrease in signing, retention and other bonus expenses. Healthcare operating margin decreased primarily due to the increases in contractor expenses, practice administration and meetings expenses and amortization of intangible assets, as percentages of revenues; partially offset by revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals.
•Education operating income increased primarily due to the increase in revenues, partially offset by increases in compensation costs for our revenue-generating professionals, contractor expenses, restructuring charges, technology expenses, and promotion and marketing expenses. The lease impairment chargeincrease in compensation costs for our revenue-generating professionals was recognizeddriven by an increase in accordance with ASC 842, headcount and annual salary increases that went into effect in the first quarter of 2022, as well as increases in performance bonus expense and signing, retention and other bonus expenses. Education operating margin increased due to revenue growth that outpaced the increase in compensation costs; partially offset by the increases in non-payroll costs, as percentages of revenues.
•LeasesCommercial operating income increased primarily due to the increase in revenues, as well as a decrease in restructuring charges; partially offset by increases in contractor expenses, promotion and marketing expenses, and compensation costs for both our revenue-generating professionals and support personnel. The increase in compensation costs was driven by an increase in performance bonus expense, partially offset by a decrease in salaries and related expenses for our revenue-generating professionals primarily driven by the divestiture of our Life Sciences business in the fourth quarter of 2021. Commercial operating margin increased due to revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals and the decrease in restructuring charges; partially offset by the increases in promotion and marketing expenses and contractor expenses, as percentages of revenues.
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Other Income (Expense), which we adopted on a modified retrospective basis on January 1, 2019.Net
Interest expense, net of interest income increased $3.7 million to $11.9 million for the year ended December 31, 2022 from $8.2 million for the year ended December 31, 2021 primarily attributable to higher levels of borrowing under our credit facility in 2022 compared to 2021, as well as an increase in interest rates over the same periods. See “Liquidity and Capital Resources” below and Note 2 “Summary of Significant Accounting Policies”7 “Financing Arrangements” within the notes to our consolidated financial statements for additional information on our adoption of ASC 842. See Note 5 “Leases” within the notessenior secured credit facility.
Other income, net decreased $14.6 million to our consolidated financial statements for additional information on the long-lived asset impairment test performed in 2019. Additionally, during 2019, we exited the remaining portion of our Middleton, Wisconsin office and an office space in Houston, Texas, resulting in restructuring charges of $0.4 million and $0.1 million, respectively, which primarily related to accelerated depreciation on related furniture and fixtures in those offices. During the fourth quarter of 2019, we entered into an amendment to the lease of our principal executive offices in Chicago, Illinois. Among other items, the amendment terminated the lease with respect to certain leased space which we previously vacated and currently sublease to a third-party. As a result of the amendment, we recognized a restructuring gain of $0.4 million. See Note 5 “Leases” for additional information on the amendment. Additional restructuring charges during 2019 include $0.6 million related to workforce reductions as we continue to better align resources with market demand and workforce reductions in our corporate operations.
The $3.7 million of restructuring charges in 2018 primarily consisted of $2.1 million related to workforce reductions to better align resources with market demand; $0.8 million related to the accrual of remaining lease payments, net of estimated sublease income, and accelerated depreciation on leasehold improvements due to exiting a portion of our Middleton, Wisconsin office; $0.4 million related to updated lease assumptions and commission costs for our San Francisco office vacated in 2017; and $0.3 million related to the divestiture of our Middle East practice within the Business Advisory segment. During the second quarter of 2018, we sold our Middle East business to a former employee who was the practice leader of that business at the time. The office exit costs incurred in 2018 were accounted for in accordance with ASC 840, Leases. See Note 11 “Restructuring Charges” within the notes to our consolidated financial statements for further discussion of our restructuring expenses.
Litigation and other losses (gains), net totaled to a net gain of $1.2$20.7 million for the year ended December 31, 2019, which primarily consisted of $1.5 million of remeasurement gains to decrease the estimated fair value of our liabilities for contingent consideration payments related to business acquisitions, partially offset by a $0.4 million litigation loss accrual related to a legal claim that was subsequently settled during the first quarter of 2020. Litigation and other losses (gains), net totaled a net gain of $2.02022 from $35.3 million for the year ended December 31, 2018, which primarily consisted of a $2.5 million litigation settlement gain for the resolution of Huron's claim in a class action lawsuit, partially offset by $0.42021. The $20.7 million of other income, net remeasurement lossesin 2022 includes a $27.0 million unrealized gain related to the increase in the estimated fair value of our contingent consideration liabilities relatedpreferred stock investment in Medically Home, partially offset by a $7.4 million unrealized loss on the market value of our deferred compensation investments that are used to business acquisitions. In connection with certain business acquisitions, we may be required to pay post-closing consideration tofund our deferred compensation liability. The $35.3 million of other income, net in 2021 includes a $31.5 million pre-tax gain on the sellers if specific financial performance targets are met over a numbersale of years as specifiedour Life Sciences business in the related purchase agreements.fourth quarter of 2021 and a $4.2 million unrealized gain on the market value of our deferred compensation investments. See Note 1310 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on the fair value of contingent consideration liabilities.
Depreciation and amortization expense decreased $6.2 million, or 18.0%, to $28.4 million for the year ended December 31, 2019, from $34.6 million for the year ended December 31, 2018. The decrease was primarily attributable to decreasing amortization expense of the trade name and customer relationships acquiredour preferred stock investment in our Studer Group acquisition and certain customer relationships acquired in other business

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acquisitions, due to the accelerated basis of amortization in prior periods, as well as certain other customer relationships acquired in business acquisitions that were fully amortized in prior periods. Intangible asset amortization included within operating expenses for the years ended December 31, 2019 and 2018 primarily related to certain customer relationships, trade names and non-competition agreements acquired in connection with our business acquisitions. See Note 3 “Acquisitions” and Note 4 “Goodwill and Intangible Assets” within the notes to our consolidated financial statements for additional information about our intangible assets.
Operating Income
Operating income increased $11.6 million, to $63.7 million for the year ended December 31, 2019, from $52.1 million for the year ended December 31, 2018. Operating margin, which is defined as operating income expressed as a percentage of revenues, increased to 7.3% in 2019 compared to 6.6% in 2018. The increase in operating margin was primarily attributable to the revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals and the decrease in intangible asset amortization expense; partially offset by the increase in performance bonus expense for our revenue-generating professionals, as a percentage of revenues.
Other Expense, Net
Total other expense, net decreased by $15.7 million to $11.2 million for the year ended December 31, 2019, from $26.9 million for the year ended December 31, 2018. The decrease in total other expense, net was primarily attributable to a $4.5 million net gain recognized in 2019 for the market value of our investments that are used to fund our deferred compensation liability, compared to a net loss of $1.6 million in 2018; as well as a $5.8 million loss recorded in 2018 related to the divestiture of our Middle East practice within our Business Advisory segment. During the second quarter of 2018, we sold our Middle East business to a former employee who was the practice leader of that business at the time. Interest expense, net of interest income decreased $3.4 million to $15.6 million in 2019 from $19.0 million in 2018, which was primarily attributable to the maturity of our Convertible Notes on October 1, 2019. See Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our Convertible Notes.Medically Home.
Income Tax Expense
For the year ended December 31, 2019,2022, our effective tax rate was 20.0%30.4% as we recognized income tax expense from continuing operations of $10.5$33.0 million on income from continuing operations of $52.5$108.6 million. The effective tax rate of 30.4% was less favorable than the statutory rate, inclusive of state income taxes, of 26.7%, primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
For the year ended December 31, 2018,2021, our effective tax rate was 44.7%21.3% as we recognized income tax expense from continuing operations of $11.3$17.0 million on income from continuing operations of $25.2$80.0 million.
The effective tax rate for 2019of 21.3% was more favorable than the statutory rate, inclusive of state income taxes, of 25.9%26.3%, primarily due to a $1.6 millionthe discrete tax benefit related to federal and state tax credits, which had a favorable impact of 3.1% on the effective tax rate; a $1.5 million tax benefitbenefits related to the changeCARES Act described below. The effective tax rate also reflected the positive impact of certain federal tax credits and the discrete tax benefit recognized during the second quarter of 2021 related to electing the Global Intangible Low-Taxed Income (“GILTI”) high-tax exclusion retroactively for the 2018 tax year. On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to GILTI that allow certain U.S. taxpayers to elect to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The GILTI high-tax exclusion is an annual election and is retroactively available. These favorable items were partially offset by certain nondeductible business expenses and increases in our valuation allowance primarily due to realizingincreases in deferred tax assets recorded for foreign tax credits,credits.
The CARES Act, which hadwas signed into law on March 27, 2020, is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other items, includes income tax provisions relating to net operating loss carryback period, options to defer payroll tax payments for a favorable impactlimited period and technical corrections to tax depreciation methods for qualified improvement property. As a result of 2.9% on the effectiveCARES Act, we recognized a $1.5 million tax rate;benefit in 2020 related to the remeasurement of a portion of our income tax receivable for the federal net operating losses incurred in 2018 and 2020 that were carried back to prior year income, both for a refund at the higher, prior year tax rate. As a result of electing the retroactive GILTI high-tax exclusion in the second quarter of 2021, we recognized a $1.0 million tax benefit of which $0.4 million related to non-taxable gains oncarrying back our investments usedincreased 2018 federal net operating loss to fund our deferred compensation liability, which hadprior year income for a favorable impactrefund at the higher, prior year tax rate. During the third quarter of 1.8% on the effective tax rate. These favorable items were partially offset by $1.0 million of2021, we recognized an additional tax expense related to disallowed executive compensation, which had an unfavorable impactbenefit of 2.0% on the effective tax rate.
The effective tax rate for 2018 was less favorable than the statutory rate, inclusive of state income taxes, of 26.2%,$2.0 million, primarily due to $1.8 million of discrete tax expense for valuation allowances, primarily due to uncertainties relating to the ability to utilize deferred tax assets recorded for foreign tax credits, which had an unfavorable impact of 6.9% on the effective tax rate; $1.2 million of discrete tax expense for share-based compensation awards that vested during 2018, which had an unfavorable impact of 4.9% on the effective tax rate; $0.6 million of additional tax expense related to disallowed executive compensation, which had an unfavorable impact of 2.5% on the effective tax rate; and $0.6 million of additional tax expense related to the change in fair value of contingent consideration, which had an unfavorable impact of 2.4%U.S. federal return to provision adjustments for carrying back our increased 2020 federal net operating loss to prior year income for a refund at the higher, prior year tax rate.
See Note 17 "Income Taxes" within the notes to our consolidated financial statements for additional information on the effectiveour income tax rate.expense (benefit).
Net Income from Continuing Operations and Earnings per Share
Net income from continuing operations increased by $28.0$12.6 million to $42.0$75.6 million for the year ended December 31, 2019,2022 from $13.9$63.0 million for the year ended December 31, 2018.2021. As a result of the increase in net income from continuing operations, diluted earnings per share from continuing operations for the year ended December 31, 20192022 was $1.87$3.64, compared to $0.63$2.89 for 2018.the year ended December 31, 2021.
EBITDA and Adjusted EBITDA
EBITDA increased $18.8$34.2 million to $101.9$148.7 million for the year ended December 31, 2019,2022 from $83.1$114.5 million for the year ended December 31, 2018. Adjusted EBITDA increased $14.4 million to $105.4 million in 2019 from $91.0 million in 2018.2021. The increase in EBITDA was primarily attributable to the increase in revenuessegment income and the $27.0 million unrealized gain recognized in the first quarter of 2022 related to the increase in the fair value of our preferred stock investment; partially offset by the $31.5 million gain on sale of our Life Sciences business recognized in the fourth quarter of 2021 and an increase in corporate expenses in 2022 compared to 2021, excluding the impact of the change in the market value of our deferred compensation liability on corporate expenses.
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Adjusted EBITDA increased $33.0 million to $130.8 million for the year ended December 31, 2019 compared to2022 from $97.8 million for the same prior year period and the loss on the divestiture of our Middle East business within our Business Advisory segment recorded in 2018. These increases to EBITDA were partially offset by the increases in salaries and related expenses for our revenue-generating professionals, selling, general and administrative

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expenses, and performance bonus expense for our revenue-generating professionals recognized in 2019 compared to 2018.ended December 31,2021. The increase in adjusted EBITDA was primarily attributable to the increase in revenues,segment operating income; partially offset by an increase in corporate expenses, excluding the increasesimpact of the change in salariesthe market value of our deferred compensation liability and related expenses for our revenue-generating professionals, selling, generalrestructuring charges on segment operating income and administrative expenses, and performance bonus expense for our revenue-generating professionals in 2019 compared to 2018.corporate expenses.
Adjusted Net Income from Continuing Operations and Adjusted Earnings per Share
Adjusted net income from continuing operations increased $15.8$14.3 million to $61.6$71.1 million for the year ended December 31, 2019,2022, compared to $45.8$56.9 million for the year ended December 31, 2018.2021. As a result of the increase in adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations increased by $0.66 to $2.74was $3.43 in 2019,2022, compared to $2.08$2.61 in 2018.2021.
Segment
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020
As a result of our operating segment modification effective January 1, 2022, we recast our historical segment information for consistent presentation. Our consolidated results were not impacted by the operating segment modification. Therefore, the following discussion compares the recast segment revenue and segment operating income for 2021 to 2020. For a discussion of our consolidated results of operations for 2021 compared to 2020, which were not impacted by the operating segment modification, refer to Part II—Item 7. "Management’s Discussion and Analysis of Financial Condition and Results
Healthcare of Operations" of the Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the United States Securities and Exchange Commission on February 24, 2022.
Revenues
HealthcareRevenues by segment and capability for the years ended December 31, 2021 and 2020 were as follows:
Revenues (in thousands)Year Ended
December 31,		Increase / (Decrease)
20212020$%
Segment:
Healthcare$444,767 $406,536 $38,231 9.4 %
Education242,374 223,325 19,049 8.5 %
Commercial218,499 214,266 4,233 2.0 %
Total revenues$905,640 $844,127 $61,513 7.3 %
Capability:
Consulting and Managed Services$555,915 $514,086 $41,829 8.1 %
Digital349,725 330,041 19,684 6.0 %
Total revenues$905,640 $844,127 $61,513 7.3 %
Total revenues increased $34.5$61.5 million, or 9.4%,7.3% to $399.2$905.6 million for the year ended December 31, 2019,2021 from $364.8$844.1 million for the year ended December 31, 2018.
For the year ended December 31, 2019, revenues from fixed-fee arrangements; time-and-expense arrangements; performance-based arrangements; and software support, maintenance and subscription arrangements represented 62.5%, 13.8%, 17.8%, and 5.9% of this segment’s revenues, respectively, compared to 65.6%, 16.0%, 11.7%, and 6.7%, respectively, in 2018. Performance-based fee revenue was $71.1 million in 2019, compared to $42.7 million in 2018. The level of performance-based fees earned may vary based on our clients’ risk sharing preferences and the mix of services we provide.
Of the overall $34.5 million increase in revenues, $33.5 million was attributable to an increase in revenues from our full-time billable consultants and $1.0 million was attributable to our full-time equivalents.2020. The increase in revenues attributable toreflected strengthened demand for services in all of our full-time billable consultantssegments; the favorable comparison against 2020, which was more significantly impacted by the COVID-19 pandemic as some clients reprioritized and delayed certain projects as a result of the uncertainties surrounding the pandemic, particularly within our Healthcare and Education segments; and the incremental revenues from our acquisitions. Additional information on our revenues by segment follows.
•Healthcare revenues increased $38.2 million, or 9.4%, which reflected strengthened demand for this segment's services as well as the favorable comparison against 2020, which was more significantly impacted by the COVID-19 pandemic as some clients reprioritized and delayed certain projects as a result of the uncertainties surrounding the pandemic. The strengthened demand was primarily driven by our revenue cycle managed services, performance improvement, and corporate finance advisory solutions within our Consulting and Managed Services capability and our technology and analytics services within our Digital capability. These increases in the average billing rate and the average number of full-time billable consultants,demand were partially offset by a decrease in the consultant utilization ratedemand for our culture and organizational excellence solution within our Consulting and Managed Services capability. Revenues in 20192021 included $6.5 million of incremental revenues from our acquisition of ForceIQ which was completed in November 2020.
The number of revenue-generating professionals within our Healthcare segment grew 42.9% to 1,596 as of December 31, 2021, compared to 2018.1,117 as of December 31, 2020. The increase in revenues attributablerevenue-generating professionals includes the hiring of approximately 300 employees during the second quarter of 2021 to expand our capacity to manage and provide revenue cycle billing, collections, insurance verification and change integrity services to our full-time equivalents reflectedhealthcare clients. These employees serve clients in our Managed Services capability, including serving under a short-term contract with an existing client which we entered into in connection with this group hire.
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•Education revenues increased $19.0 million, or 8.5%. This segment's revenues were significantly impacted by the COVID-19 pandemic beginning in the third quarter of 2020 through the first half of 2021 as some clients reprioritized and delayed certain projects as a result of the uncertainties surrounding the pandemic. Demand for this segment's services strengthened over the course of 2021, primarily in our strategy and operations and research solutions within our Consulting and Managed Services capability, driving an overall increase in the averagetotal revenues for full year 2021 compared to full year 2020. Revenues in 2021 included $1.0 million of incremental revenues from our acquisitions of Unico Solutions and Whiteboard, which were completed in February 2021 and December 2021, respectively.
The number of full-time equivalents,revenue-generating professionals within our Education segment grew 20.3% to 1,050 as of December 31, 2021, compared to 873 as of December 31, 2020.
•Commercial revenues increased $4.2 million, or 2.0%, driven by strengthened demand for our cloud-based technology and analytics solutions within our Digital capability, partially offset by athe decrease in revenues related to the revenue per full-time equivalentdivestiture of our Life Sciences business in 2019the fourth quarter of 2021. Revenues generated by the Life Sciences business in the first ten months of 2021 and full year 2020 were $16.7 million and $29.4 million, respectively. Revenues in 2021 included $7.4 million of incremental revenues from our acquisitions of ForceIQ, Inc. and Unico Solutions, which were completed in November 2020 and February 2021, respectively.
The number of revenue-generating professionals within our Commercial segment grew 6.7% to 1,130 as of December 31, 2021, compared to 2018.1,059 as of December 31, 2020. This increase includes the impact of the divestiture of our Life Sciences business, which employed 99 revenue-generating professionals as of December 31, 2020.
Operating Income and Operating Margin
Healthcare segment operatingOperating income increased $17.7$81.7 million or 16.3%, to $125.7$52.8 million for the year ended December 31, 2019,2021 from $108.1a loss of $28.9 million for the year ended December 31, 2018.2020. The Healthcareoperating loss for the year ended December 31, 2020 is primarily attributable to $59.8 million of non-cash pretax goodwill impairment charges recognized in the first quarter of 2020 that related to our legacy Business Advisory segment. The goodwill impairment charges are not allocated at the segment operatinglevel because the underlying goodwill asset is reflective of our corporate investment in the segment and we do not include the impact of goodwill impairment charges in our evaluation of segment performance. See Note 4 “Goodwill and Intangible Assets” within the notes to our consolidated financial statements for additional information on the goodwill impairment charges recognized in the first quarter of 2020.
Operating margin, which is defined as segment operating income expressed as a percentage of segment revenues, increased to 31.5%5.8% in 2019 from 29.6%2021, compared to (3.4%) in 2018. The2020.
Operating income and operating margin for each of our segments is as follows. See the Segment and Consolidated Operating Results table above for a reconciliation of our total segment operating income to consolidated Huron operating income.
Segment Operating Income (in thousands, except operating margin percentages)Year Ended December 31,Increase / (Decrease)
20212020
Healthcare$118,324 26.6%$105,650 26.0%$12,674 
Education52,398 21.6%45,780 20.5%6,618 
Commercial34,296 15.7%39,044 18.2%(4,748)
Total segment operating income$205,018 $190,474 $14,544 
•Healthcare operating income increased primarily due to the increase in this segment’srevenues, as well as decreases in practice administration and meetings expenses, restructuring charges and contractor expenses. These increases to operating margin was primarily attributable to revenue growth that outpaced an increase in salaries and related expenses for our revenue-generating professionals,income were partially offset by an increase in compensation costs for our revenue-generating professionals. The increase in compensation costs was driven by an increase in headcount, as well as increases in performance bonus expense and signing, retention and other bonus expense. Healthcare operating margin increased primarily due to decreases in compensation costs for our support personnel, contractor expenses, practice administration and meetings expenses and restructuring charges. These increases to the segment operating margin were partially offset by the increase in compensation costs for our revenue-generating professionals, as a percentage of revenues.
Business Advisory
Revenues
Business Advisory segment revenues•Education operating income increased $16.3 million, or 6.9%,primarily due to $252.5 million for the year ended December 31, 2019, from $236.2 million for the year ended December 31, 2018.
For the year ended December 31, 2019, revenues from fixed-fee arrangements; time-and-expense arrangements; performance-based arrangements; and software support, maintenance and subscription arrangements represented 39.9%, 55.3%, 2.7%, and 2.1% of this segment's revenues, respectively, compared to 41.5%, 54.5%, 2.3%, and 1.7%, respectively, in 2018. Performance-based fee revenue for the year ended December 31, 2019 was $6.9 million compared to $5.4 million in 2018. The level of performance-based fees earned may vary based on our clients’ preferences and the mix of services we provide.
Of the overall $16.3 million increase in revenues $18.0 million was attributable to an increaseand a decrease in revenues generated by our full-time billable consultants;restructuring charges, partially offset by a $1.7 million decrease in revenues generated by our full-time equivalents. The increase in revenues from our full-time billable consultants reflected an increase in the average number of full-time billable consultants, partially offset by decreases in the average billing rate and the consultant utilization rate. The decrease in revenues from our full-time equivalents was driven by a decreased use of contractors and project consultants, partially offset by an increase in software support and maintenance revenues; and reflected a decrease in the average number of full-time equivalents, partially offset by an increase in revenue per full-time equivalent in 2019 compared to 2018.

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Operating Income
Business Advisory segment operating income decreased by $0.9 million, or 1.8%, to $49.7 million for the year ended December 31, 2019, compared to $50.6 million for the year ended December 31, 2018. Segment operating margin decreased to 19.7% for 2019 from 21.4% for 2018. The decrease in this segment’s operating margin was also attributable to increases in salaries and related expenses and performance bonus expense for our revenue-generating professionals, as percentages of revenues. These decreases to the operating margin, were offset by decreases in contractor expense, restructuring charges, and third-party consulting expenses. Additionally, the decrease in the operating margin reflected a higher percentage of this segment's revenues derived from our lower margin solutions in 2019 compared to 2018.
Education
Revenues
Education segment revenues increased $30.9 million, or 15.9%, to $225.0 million for the year ended December 31, 2019, from $194.2 million for the year ended December 31, 2018.
For the year ended December 31, 2019, revenues from fixed-fee arrangements; time-and-expense arrangements; and software support, maintenance and subscription arrangements represented 23.0%, 68.8%, and 8.2% of this segment’s revenues, respectively, compared to 20.4%, 72.5%, and 7.1%, respectively, in 2018.
Of the overall $30.9 million increase in revenues, $25.4 million was attributable to revenues generated by our full-time billable consultants and $5.5 million was attributable to our full-time equivalents. The increase in revenues from our full-time billable consultants reflected an increase in the average number of full-time billable consultants; partially offset by a decrease in the average billing rate in 2019 compared to 2018. The increase in revenues from our full-time equivalents was primarily driven by an increased use of contractors and an increase in software and data hosting revenues, partially offset by a decreased use of project consultants; and reflected increases in the average number of full-time equivalents and revenue per full-time equivalent in 2019 compared to 2018.
Operating Income
Education segment operating income increased $7.5 million, or 15.5%, to $55.7 million for the year ended December 31, 2019, from $48.2 million for the year ended December 31, 2018. The Education segment operating margin was 24.8% for both 2019 and 2018. The Education segment's revenue growth outpaced increases in salaries and related expensescompensation costs for our revenue-generating professionals and selling, generaltechnology expenses. The increase in compensation costs was driven by an increase in headcount, as well as increases in performance bonus expense and administrativesigning, retention and other bonus expenses. This increaseEducation operating margin increased due to the decrease in restructuring charges and revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals.
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•Commercialoperating margin wasincome decreased primarily due to increases in restructuring charges, contractor expenses, and compensation costs for our support personnel, partially offset by increasesthe increase in contractor expenserevenues and performance bonus expensea decrease in compensation costs for our revenue-generating professionals. The decrease in compensation costs for our revenue-generating professionals was primarily driven by a decrease in performance bonus expense, largely offset by the increase in headcount. Commercial operating margin decreased primarily due to the increases in restructuring charges and contractor expenses, as percentages of revenues.revenues; partially offset by the decrease in compensation costs for our revenue-generating professionals.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $11.6$11.8 million, $33.1$20.8 million, and $16.9$67.2 million at December 31, 2019, 2018,2022, 2021, and 2017,2020, respectively. As of December 31, 2019,2022, our primary sources of liquidity are cash on hand, cash flows from our U.S. operations, and borrowing capacity available under our credit facility. 
Cash Flows (in thousands): Year Ended December 31,Cash Flows (in thousands):Year Ended December 31,
2019 2018 2017202220212020
Net cash provided by operating activities $132,220
 $101,658
 $99,795
Net cash provided by operating activities$85,400 $17,987 $136,738 
Net cash used in investing activities (35,002) (18,562) (128,948)Net cash used in investing activities(20,128)(20,143)(42,034)
Net cash provided by (used in) financing activities (118,836) (66,690) 28,821
Net cash used in financing activitiesNet cash used in financing activities(74,108)(44,410)(39,615)
Effect of exchange rate changes on cash 115
 (208) 214
Effect of exchange rate changes on cash(111)170 484 
Net increase (decrease) in cash and cash equivalents $(21,503) $16,198
 $(118)Net increase (decrease) in cash and cash equivalents$(8,947)$(46,396)$55,573 
Operating Activities
Net cash provided by operating activities totaled $132.2 million and $101.7 million for the years ended December 31, 2019 and 2018, respectively. Our operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable and accrued expenses, accrued payroll and related benefits, operating lease obligations and deferred revenues. The volume of services rendered and the related billings and timing of collections on those billings, as well as payments of our accounts payable and salaries, bonuses, and related benefits to employees affect these account balances. Our purchase obligations primarily consist of payments for software and other information technology products to support our business and corporate infrastructure.
Net cash provided by operating activities increased $67.4 million to $85.4 million in 2022 from $18.0 million in 2021. The increase in net cash provided by operating activities in 20192022 compared to 20182021 was primarily attributable to an increase in cash collections from clients, which was driven by revenue growth,in 2022 compared to the prior year; partially offset by increases in payments for salaries and related expenses for our revenue-generating professionals, selling, general and administrative expenses and contractor expenses for 2022 compared to 2021 and an increase in the higher amount paid for annual performance bonuses duringin the first quarter of 20192022 compared to the first quarter of 2018.

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2021.
Investing Activities
Our investing activities primarily consist of purchases of complementary businesses; purchases of property and equipment, primarily related to computers and related equipment for our employees and leasehold improvements and furniture and fixtures for office spaces; payments related to internally developed cloud-based software sold to our clients; and investments. Our investments include a convertible note investment in Shorelight Holdings, LLC, a preferred stock investment in Medically Home Group, Inc., and investments in life insurance policies that are used to fund our deferred compensation liability.
Net cash used in investing activities was $35.0 million and $18.6$20.1 million for the years ended December 31, 2019 and 2018, respectively.
2022. The use of cash in 20192022 primarily consisted of $13.2$12.5 million for purchases of property and equipment, primarily related to purchases of computers and networkrelated equipment and leasehold improvements for new office spaces in certain locations; $10.3improvements; $11.8 million for payments related to internally developed software; $5.0and $3.4 million for a purchasethe purchases of investment securitiesbusinesses. These uses of cash for investing activities were partially offset by $4.8 million of cash received for the sale of our aircraft in the fourthfirst quarter of 2019; $4.72022 and $3.4 million of cash received for contributions todistributions from our life insurance policies whichthat are used to fund our deferred compensation plan; and $2.5liability.
Net cash used in investing activities was $20.1 million for the purchase of a business in the third quarter of 2019.
2021. The use of cash in 20182021 primarily consisted of $8.9$44.8 million for the purchases of businesses; $10.9 million for purchases of property and equipment, primarily related to purchases ofleasehold improvements, computers and network equipment; $6.1related equipment and furniture and fixtures for certain office spaces; $4.9 million for payments related to internally developed software; $2.3 million for payments related to the divestiture of our Middle East practice within the Business Advisory segment; and $2.0$1.2 million for contributions to our life insurance policies which fund our deferred compensation plan.policies. These uses of cash from investing activities were partially offset by $41.3 million of cash received for the sale of the Life Sciences business in the fourth quarter of 2021.
We estimate that cash utilized for purchases of property and equipment and software development in 20202023 will betotal approximately $25$30 million to $30$35 million; primarily consisting of software development costs, information technology related equipment to support our corporate infrastructure, and leasehold improvements and furniture and fixtures for certain office locations.
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Financing Activities
Our financing activities primarily consist of borrowings and repayments under our senior secured credit facility, share repurchases, shares redeemed for employee tax withholdings upon vesting of share-based compensation, and payments for contingent consideration liabilities related to business acquisitions. See "Financing Arrangements" below for additional information on our senior secured credit facility.
Net cash used in financing activities was $118.8$74.1 million and $66.7 million for the years ended December 31, 2019 and 2018, respectively.
in 2022. During 2019,2022, we borrowed $347.0$314.0 million under our senior secured credit facility of which $217.0 million was usedprimarily to repay a portion of the $250.0 million outstanding principal onfund our Convertible Notesoperations, including our annual performance bonus payment in the fourthfirst quarter of 2019. The remaining $33.0 million outstanding principal on our Convertible Notes was repaid with cash on hand. During 2019, we also2022, and made repayments on our credit facilityborrowings of $192.5$256.8 million. The repayments on our borrowings included the repayment of the outstanding principal of our promissory note due 2024 of $2.7 million from the proceeds received for the sale of our aircraft. Additionally, during 2022, we repurchased and retired $14.2$121.3 million of our common stock under our Share Repurchase Program, as definedshare repurchase program discussed below, of which $1.2$1.1 million settled in the first quarter of 2020.2023, and settled $0.2 million of share repurchases that were accrued as of December 31, 2021. During 2019,2022, we paid $10.0reacquired $7.8 million of common stock as a result of tax withholdings upon vesting of share-based compensation. Additionally, we made payments of $2.7 million for debt issuance costs related to the Third Amended and Restated Credit Agreement executed in the fourth quarter of 2022. We also made deferred acquisition payments of $1.9 million to the sellers of certain business acquisitions forbusinesses we acquired. These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements. Of the total $10.0 million paid, $4.7 million is classified as a
Net cash outflow fromused in financing activities and represents the amount paid up to the initial fair value of contingent consideration liability recorded as of the acquisition date. The remaining $5.3was $44.4 million is classified as a cash outflow from operating activities.
in 2021. During 2018,2021, we borrowed $204.3$235.0 million under our senior secured credit facility, primarily to fund our operations, including our annual performance bonus payment in the first quarter of 2021 and for the acquisitions completed in the fourth quarter of 2021. We made repayments on our credit facility of $259.8 million.$205.0 million during 2021. Additionally, during 2021, we repurchased and retired $64.6 million of our common stock under our share repurchase program, and repurchased and retired $0.2 million of our common stock that was accrued as of December 31, 2021. We also paid $12.0reacquired $10.1 million to the sellers of certain businesses acquisitions for achieving specified financial performance targets in accordance with the related purchase agreements. Of the $12.0 million paid, $7.0 million is classifiedcommon stock as a cash outflow from financing activities and represents the amount paid up to the initial fair valueresult of the contingent consideration liability recorded astax withholdings upon vesting of the acquisition date. The remaining $5.0 million is classified as a cash outflow from operating activities.share-based compensation.
Share Repurchase Program
We currently haveIn November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $125$50 million of our common stock through OctoberDecember 31, 2020 (the "Share Repurchase Program").2021. The share repurchase program has been subsequently extended and increased, most recently in the fourth quarter of 2022. The current authorization extends the share repurchase program through December 31, 2023 with a repurchase amount of $300 million, of which $108.9 million remains available as of December 31, 2022. The amount and timing of repurchases under the repurchasesshare repurchase program were and will continue to be determined by management and will depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. In 2019, we repurchased and retired 210,437 shares for $14.2 million, of which $1.2 million settled in the first quarter of 2020. No shares were repurchased under this program in 2018. As of December 31, 2019, $20.9 million remains available for share repurchases.
Financing Arrangements
At December 31, 2019,2022, we had $205.0$290.0 million outstanding under our senior secured credit facility, and $3.9 million outstanding under a promissory note, as discussed below. The Convertible Notes matured on October 1, 2019.
1.25% Convertible Senior Notes
In September 2014, we issued $250 million principal amount of 1.25% convertible senior notes due 2019 in a private offering. The Convertible Notes were senior unsecured obligations of the Company and paid interest semi-annually on April 1 and October 1 of each year at an annual rate of 1.25%. The Convertible Notes matured on October 1, 2019. Upon maturity, we refinanced $217.0 million of the principal amount of the outstanding Convertible Notes with the borrowing capacity available under our revolving credit facility and funded the remaining $33.0 million principal payment with cash on hand. See Note 7 “Financing Arrangements” within the notes to the consolidated financial statements for additional information on our Convertible Notes.

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Senior Secured Credit Facility
On November 15, 2022, the Company entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”). The Company has a $600 million senior secured revolving credit facility, subject toAmended Credit Agreement amended and restated, in its entirety, the terms of a Second Amended and Restated Credit Agreement datedentered into as of March 31, 2015 as amended to date (as amended and modified, the "Amended"Existing Credit Agreement"),. The Amended Credit Agreement consists of a $600 million five-year senior secured revolving credit facility that becomes due and payable in full upon maturity on September 27, 2024.November 15, 2027. The Amended Credit Agreement provides the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount of up to $150$250 million, subject to customary conditions and the approval of any lender whose commitment would be increased, resulting in a maximum available principal amount under the Amended Credit Agreement of $750$850 million. BorrowingsThe initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under the Existing Credit Agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, acquisitions of businesses, share repurchases, permitted acquisitions, and other general corporate purposes.
Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, two, three or six-month LIBORsix month Term SOFR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.125% per annum and 1.875% per annum, in the case of LIBORTerm SOFR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time. Fees and interest on borrowings are paid on a monthly basis.
The Company and PNC Capital Markets, LLC, as Sustainability Structuring Agent, may amend the Amended Credit Agreement, with the consent of the Required Lenders (as defined in the Amended Credit Agreement), in order to incorporate specified key performance indicators with respect to certain environmental, social and governance targets of the Company. Upon the effectiveness of any such amendment, and based upon the performance of the Company against those key performance indicators, certain adjustments to the otherwise applicable rates for interest, commitment fees and letter of credit fees will be made. These adjustments will not exceed an increase or decrease of 0.01% in
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the aggregate for all key performance indicators in the case of the commitment fee rate or an increase or decrease of 0.05% in the aggregate for all key performance indicators in the case of the Term SOFR borrowings, base rate borrowings or letter of credit fee rate.
Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances.circumstances, including upon an Event of Default (as defined in the Amended Credit Agreement). In addition, we have the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) of 3.75 to 1.00; however, the maximum permitted Consolidated Leverage Ratio will increase to 4.004.25 to 1.00 upon the occurrence of certain transactions,a Qualified Acquisition (as defined in the Amended Credit Agreement), and (ii) a minimum Consolidated Interest Coverage Ratio (defined as the ratio of consolidated EBITDA to interest) of 3.503.00 to 1.00. Consolidated EBITDA for purposes of the financial covenants is calculated on a continuing operations basis and includes adjustments to add back non-cash goodwill impairment charges, share-based compensation costs, certain non-cash restructuring charges, pro forma historical EBITDA for businesses acquired, and other specified items in accordance with the Amended Credit Agreement. For purposes of the Consolidated Leverage Ratio, total debt is on a gross basis and is not netted against our cash balances. At December 31, 20192022 and December 31, 2018,2021, we were in compliance with these financial covenants. Our Consolidated Leverage Ratio as of December 31, 20192022 was 1.641.92 to 1.00, compared to 2.831.73 to 1.00 as of December 31, 2018.2021. Our Consolidated Interest Coverage Ratio as of December 31, 20192022 was 15.2914.04 to 1.00, compared to 11.0318.43 to 1.00 as of December 31, 2018. 2021.
The reduction inAmended Credit Agreement contains restricted payment provisions, including a potential limit on the amount of dividends we may pay. Pursuant to the terms of the Amended Credit Agreement, if our Consolidated Leverage Ratio asis greater than 3.50, the amount of December 31, 2019 compareddividends and other Restricted Payments (as defined in the Amended Credit Agreement) we may pay is limited to December 31, 2018 was driven by an increase in cash flows from operations, deployment of cashamount up to reduce borrowings and improved profitability. Our maximum borrowing capacity, after consideration of our restrictive covenants and the unused borrowing capacity under the revolving credit facility, was $271.6 million at December 31, 2019 compared to $100.1 million at December 31, 2018.$50 million.
Principal borrowings outstanding under the Amended Credit Agreement at December 31, 20192022 and December 31, 20182021 totaled $205.0$290.0 million and $50.0$230.0 million, respectively. These borrowings carried a weighted average interest rate of 3.0%3.8% at December 31, 20192022 and 3.7%2.7% at December 31, 20182021 including the impact of the interest rate swapswaps described in Note 12 “Derivative Instruments and Hedging Activity" within the notes to the consolidated financial statements. The borrowing capacity under the revolving credit facility is reduced by any outstanding borrowings under the revolving credit facility and outstanding letters of credit. At both December 31, 2019,2022 and 2021, we had outstanding letters of credit totaling $1.7$0.7 million, which are primarily used as security deposits for our office facilities.
The Amended Credit Agreement contains restricted payment provisions, including a potential limit on As of December 31, 2022 and 2021, the amount of dividends we may pay. Pursuant tounused borrowing capacity under the terms of the Amended Credit Agreement, if our Consolidated Leverage Ratio is greater than 3.25, the amount of dividendsrevolving credit facility was $309.3 million and other Restricted Payments (as defined in the Amended Credit Agreement) we may pay is limited to an amount up to $25 million.$369.3 million, respectively.
For further information, see Note 7 “Financing Arrangements” within the notes to the consolidated financial statements. For a discussion of certain risks and uncertainties related to the Amended Credit Agreement, see Part I—Item 1A. "Risk“Risk Factors.”
Promissory Note due 2024
On June 30, 2017, in conjunction with our purchase of an aircraft related to the acquisition of Innosight, we assumed, from the sellers of the aircraft, a promissory note with an outstanding principal balance of $5.1 million. The principal balance of the promissory note is subject to scheduled monthly principal payments until the maturity date of March 1, 2024, at which time a final payment of $1.5 million, plus any accrued and unpaid interest, will be due. Under the terms of the promissory note, we pay interest on the outstanding principal amount at a rate of one-month LIBOR plus 1.97% per annum. The obligations under the promissory note are secured pursuant to a Loan and Aircraft Security Agreement with Banc of America Leasing & Capital, LLC, which grants the lender a first priority security interest in the aircraft. At December 31, 2019, the outstanding principal amount of the promissory note was $3.9 million, and the aircraft had a carrying amount of $5.1 million. At December 31, 2018, the outstanding principal amount of the promissory note was $4.4 million, and the aircraft had a carrying amount of $5.8 million.

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For further information, see Note 7 “Financing Arrangements” within the notes to the consolidated financial statements.
Future Financing Needs
Our primary financing need has beenis to fund our long-term growth. Our growth strategy is to expand our service offerings, which may require investments in new hires, acquisitions of complementary businesses, possible expansion into other geographic areas, and related capital expenditures.
We believe our internally generated liquidity, together with our available cash and the borrowing capacity available under our revolving credit facility and access to external capital resources will be adequate to fundsupport our current financing needs and long-term growth and capital needs arising from cash commitments and debt service obligations.strategy. Our ability to secure short-term and long-termadditional financing in the future, if needed, will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity, and the overall condition of the credit markets.
CONTRACTUAL OBLIGATIONS
The following table represents our significant obligations and commitments as of December 31, 2019 and the scheduled years of payments (in thousands).
   Payments Due by Period
 Total 2020 2021-2022 2023-2024 Thereafter
Long-term bank borrowings—principal and interest (1)
$234,037
 $6,113
 $12,226
 $215,698
 $—
Promissory note—principal and interest (2)
4,276
 661
 1,308
 2,307
 —
Operating lease obligations (3)
90,887
 9,772
 23,541
 22,363
 35,211
Purchase obligations (4)
29,593
 15,504
 9,869
 4,220
 —
Deferred compensation (5)
27,544
        
Uncertain tax positions (6)
78
        
Total contractual obligations$386,415
 $32,050
 $46,944
 $244,588
 $35,211
(1)
The interest payments on long-term bank borrowings are estimated based on the principal amount outstanding and the interest rate in effect as of December 31, 2019. Actual future interest payments will differ due to changes in our borrowings outstanding and the interest rate on those borrowings, as the interest rate varies based on the fluctuations in the variable base rates and the spread we pay over those base rates pursuant to the Amended Credit Agreement. Refer to “Liquidity and Capital Resources” and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for more information on our outstanding borrowings.
(2)
The interest payments on the promissory note are estimated based on the principal amount outstanding, scheduled principal payments, and the interest rate in effect as of December 31, 2019. Actual future interest payments may differ due to changes in the principal amount outstanding and the interest rate on that principal amount, as the interest rate varies based on the fluctuations in the one-month LIBOR rate. Refer to “Liquidity and Capital Resources” and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for more information on the promissory note.
(3)
We lease our facilities under operating lease arrangements expiring on various dates through 2029, with various renewal options. We lease office facilities under non-cancelable operating leases that include fixed or minimum payments plus, in some cases, scheduled base rent increases over the term of the lease. Refer to Note 5 “Leases” within the notes to our consolidated financial statements for more information on our operating lease obligations.
(4)Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding, and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include agreements that are cancelable without penalty.
(5)
Included in deferred compensation and other liabilities on our consolidated balance sheet as of December 31, 2019 is a $27.5 million obligation for deferred compensation. The specific payment dates for the deferred compensation are unknown; therefore, the related balances have not been reflected in the “Payments Due by Period” section of the table. This deferred compensation liability is funded by corresponding deferred compensation plan assets. Refer to Note 15 “Employee Benefit and Deferred Compensation Plans” within the notes to our consolidated financial statements for more information on our deferred compensation plan.
(6)Our liabilities for uncertain tax positions are classified as non-current and includes the accrual of potential payment of interest and penalties. We are unable to reasonably estimate the timing of future payments as it depends on examinations by taxing authorities; as such, the related balance has not been reflected in the “Payments Due by Period” section of the table.

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OFF-BALANCE SHEET ARRANGEMENTS
We are not a party to any material off-balance sheet arrangements.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our significant accounting policies are discussed in Note 2 “Summary of Significant Accounting Policies,”Policies” within the notes to our consolidated financial statements. We regularly review our financial reporting and disclosure practices and accounting policies to ensure that our financial reporting and disclosures provide accurate information relative to the current economic and business environment. The preparation of financial statements in conformity with GAAP requires management to make assessments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Critical accounting policies and estimates are those policies and estimates that we believe present the most complex or subjective measurements and have the most potential to impact our financial position and operating results. While all decisions regarding accounting policies and estimates are important, we believe that there are five accounting policies and estimates that could be considered critical: revenue recognition, allowances for doubtful accounts and unbilled services, business combinations, carrying values of goodwill and other intangible assets, and accounting for income taxes.
Revenue Recognition
We generate substantially all of our revenues from providing professional services to our clients. We also generate revenues from software licenses; software support and maintenance and subscriptions to our cloud-based analytic tools and solutions; speaking engagements; conferences; and publications. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, we allocate the total transaction price to each performance obligation based on its relative standalone selling price, which is determined based on our overall pricing objectives, taking into consideration market conditions and other factors.
Revenue is recognized when control of the goods and services provided are transferred to our customers and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when we satisfy the performance obligations.
We typically satisfy our performance obligations for professional services over time as the related services are provided. The performance obligations related tolicenses, software support and maintenance and subscriptions to our cloud-based analytic tools and solutions, are typically satisfied evenly over the course of the service period. Other performance obligations, such as certain software licenses, speaking engagements, conferences, and publications, are satisfied at a point in time.publications.

We generate our revenuesOur revenue is generated under four types of billing arrangements: fixed-fee (including software license revenue); time-and-expense; performance-based; and software support, maintenance and subscriptions. Determining the method and amount of revenue to recognize requires us to make judgments and estimates. Specifically, multiple performance obligation arrangements require us to allocate the total transaction price to each performance obligation based on its relative standalone selling price, for which we rely on our overall pricing objectives, taking into consideration market conditions and other factors. Provisions are recorded for the estimated realization adjustments on all engagements, including engagements for which fees are subject to review by the bankruptcy courts. We continually evaluate our estimates of the provisions based on available information and experiences. Additionally, when accounting for fixed-fee and performance-based billing arrangements, we must make additional judgments and estimates as further described below.

In fixed-fee billing arrangements for professional services, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. We generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Contracts within our Culture and Organizational Excellence solution include fixed-fee partner contracts with multiple performance obligations, which primarily consist of coaching services, as well as speaking engagements, conferences, publications and software products (“Partner Contracts”). Revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract. All other revenues under Partner Contracts, including speaking engagements, conferences and publications, are recognized at the time the goods or services are provided. Estimates of total engagement revenues and cost of services are monitored regularly during the term of the engagement. If our estimates indicate a potential loss, such loss is recognizedAny increased or unexpected costs or unanticipated delays in connection with the period in which the loss first becomes probable and reasonably estimable.performance of these engagements could make these contracts less profitable or unprofitable.
We also generate revenues from software licenses for our revenue cycle management software and research administration and compliance software. Licenses for our revenue cycle management software are sold only as a component of our consulting projects, and the services we provide are essential to the functionality of the software. Therefore, revenues from these software licenses are recognized over the term of the related consulting services contract. License revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered.
Time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and publications purchased by our clients outside of Partner Contracts within our Culture and Organizational Excellence solution. We recognize revenues under time-and-expense arrangements as the related services or publications are provided, using the right to invoice practical

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expedient which allows us to recognize revenue in the amount that we have a right to invoice based on the number of hours worked and the agreed upon hourly rates or the value of the speaking engagements, conferences or publications purchased by our clients.
In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur. We recognize revenue under performance-based billing arrangements using the following steps: 1) estimate variable consideration using a probability-weighted assessment of the fees to be earned, 2) apply a constraint to the estimated variable consideration to limit the amount that could be reversed when the uncertainty is resolved (the “constraint”), and 3) recognize revenue of estimated variable consideration, net of the constraint, based on work completed to-date versus our estimates of the total services to be provided under the engagement.
Clients that have purchased one Our estimates are monitored throughout the life of each contract and are based on an assessment of our software licenses can pay an annual feeanticipated performance, historical experience, and other information available at the time. While we believe that the estimates and assumptions we used for software support and maintenance. We also generate subscription revenue from our cloud-based analytic tools and solutions. Software support, maintenance and subscription revenues are recognized ratably over the support or subscription period. These fees are generally billed in advance and included in deferred revenues until recognized.
Provisions are recordedrecognition for the estimated realization adjustments on all engagements, including engagements for which fees are subject to review by the bankruptcy courts.
Expense reimbursements that are billable to clients are included in total revenues and reimbursable expenses. Under fixed-feeperformance-based billing arrangements we estimateare reasonable, subsequent changes could materially impact our results of operations.
See Note 2 “Summary of Significant Accounting Policies” within the total amount of reimbursable expensesnotes to be incurred over the course of the engagement and recognize the estimated amount asconsolidated financial statements for additional information on our revenue using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Under time-and-expense billing arrangements we recognize reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Subcontractors that are billed to clients at cost are also included in reimbursable expenses. When billings do not specifically identify reimbursable expenses, we allocate the portion of the billings equivalent to these expenses to reimbursable expenses.recognition accounting policy.
Allowances for Doubtful Accounts and Unbilled Services
We maintain allowances for doubtful accounts and for services performed but not yet billed based on several factors, including the estimated cash realization from amounts due from clients, an assessment of a client’s ability to make required payments, and the historical percentages of fee adjustments and write-offs by age of receivables and unbilled services. The allowances are assessed by management on a regular basis. These estimates may differ from actual results. If the financial condition of a client deteriorates in the future, impacting the client’s ability to make payments, an increase to our allowance might be required or our allowance may not be sufficient to cover actual write-offs.
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We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments.revenue. To the extent the provision relateswe write-off accounts receivable due to a client’s inability to make required payments on accounts receivables, we recordpay, the provision tocharge is recognized as a component of selling, general and administrative expenses.
Business Combinations
We use the acquisition method of accounting for business combinations.The assets acquired and liabilities assumed in a business combination, including identifiable intangible assets, are recorded at their estimated fair values as of the acquisition date. date, with the exception of contract assets and liabilities which are recognized and measured in accordance with our revenue recognition accounting policy described in Note 2 "Summary of Significant Accounting Policies" within the notes to the consolidated financial statements. Goodwill is recorded as the excess of the fair value of consideration transferred, including any contingent consideration, over the fairnet value of the net assets acquired.acquired and liabilities assumed. We base the fair values of identifiable intangible assets on detailed valuations that require management to make significant judgments, estimates, and assumptions, such as the expected future cash flows to be derived from the intangible assets, discount rates that reflect the risk factors associated with future cash flows, and estimates of useful lives.
We measure and recognize contingent consideration at fair value as of the acquisition date. We estimate the fair value of contingent consideration based on either a probability-weighted assessment of the specific financial performance targets being achieved or a Monte Carlo simulation model, as appropriate. These fair value measurements require the use of significant judgments, estimates, and assumptions, including financial performance projections and discount rates. The fair value of the contingent consideration is reassessed quarterly based on assumptions used in our latest financial projections and input provided by practice leaders and management, with any change in the fair value estimate recorded in earnings in that period. Increases or decreases in the fair value of contingent consideration liabilities resulting from changes in the estimates or assumptions could materially impact the financial statements.
See Note 3 "Acquisitions"“Acquisitions and Divestitures” within the notes to our consolidated financial statements for additional information regardingon our acquisitions.

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Financial Instruments” within the notes to our consolidated financial statements for additional information on our contingent consideration liabilities.
Carrying Values of Goodwill and Other IntangiblesIntangible Assets
We test goodwill for impairment, at the reporting unit level, annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. We perform our annual goodwill impairment test as of November 30 and monitor for interim triggering events on an ongoing basis. A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. At the timeAs of our November 30, 2019 annual goodwill impairment test,December 31, 2022, we had fivehave three reporting units with goodwill balances:units: Healthcare, Education, Business Advisory, Strategy and Innovation, and Life Sciences. The Business Advisory, Strategy and Innovation, and Life Sciences reporting units, along with the Enterprise Solutions and Analytics reporting unit which does not have a goodwill balance, make up our Business Advisory operating segment.Commercial.
Under GAAP, we have the option to first assess qualitative factors to determine whether the existence of current events or circumstances would lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying value, no further testing is necessary. However, if we conclude otherwise, then we are required to perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying value of the reporting unit. If the fair value of the reporting unit is less than its carrying value, a non-cashan impairment charge is recorded in an amount equal to that difference with the loss not to exceed the total amount of goodwill allocated to the reporting unit.
We haveFor the option to bypass the qualitative assessment for any reporting unitgoodwill reallocation and proceed directly to performing the quantitative goodwill impairment test.
For reporting units wheretests performed in 2022, we perform the quantitative test, we determinedetermined the fair value of our reporting units using a combination of the income approach and the market approach. For a company such as ours, the income and market approachesapproach will generally provide the most reliable indicationsindication of fair value because the value of such companies is dependent on their ability to generate earnings. We utilized a discounted cash flow analysis, which involves estimating the expected after-tax cash flows that will be generated by each reporting unit and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted EBITDA margins, and discount rates. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.
The following is a discussion of ourthe goodwill impairment analysistests performed during 2019.2022.
2019First Quarter 2022 Goodwill Reallocation and Goodwill Impairment Test
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in
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the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment.
The three reportable segments of Healthcare, Education and Commercial are also our reporting units for goodwill impairment testing purposes. As a result of the reorganization, we reallocated the goodwill balances of our historical reporting units to our new reporting units based on the relative estimated fair values of each component of the historical reporting units to be allocated to the new reporting units. Additionally, we performed a goodwill impairment test on the goodwill balances of each of our reporting units as of January 1, 2022 by comparing the fair value of the reporting unit to its carrying value, including the reallocated goodwill. Based on the results of the goodwill impairment test, we determined the fair values of the Healthcare, Education, and Commercial reporting units exceeded their carrying values by 37%, 199%, and 105%, respectively. As such, we concluded that there was no indication of goodwill impairment for all three reporting units as of January 1, 2022. Further, we determined that neither a 100 basis point decrease in the estimated long-term growth rate nor a 100 basis point increase in the discount rate for each reporting unit would have resulted in an indication of goodwill impairment for any of the reporting units.
We relied on the income approach to estimate the fair value of the reporting units for both the goodwill reallocation and the goodwill impairment test. The income approach utilized a discounted cash flow analysis, which involved estimating the expected after-tax cash flows that will be generated by each business and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted EBITDA margins, and discount rates that reflect the risk inherent in the future cash flows. In estimating future cash flows, we relied on internally generated ten-year forecasts. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.
2022 Annual Goodwill Impairment Analysis
Pursuant to our policy, we performed our annual goodwill impairment test as of November 30, 2019 on2022 for our fivethree reporting units with goodwill balances:units: Healthcare, Education, Business Advisory, Strategy and Innovation, and Life Sciences.Commercial. We performed a qualitative assessment over the Healthcare, Education, Business Advisory, and Life Sciencesall reporting units to determine if it was more likely than not the respective fair values of these reporting units were less than their carrying amounts, including goodwill. We elected to bypass the qualitative assessment and performed a quantitative impairment test for the Strategy and Innovation reporting unit as the reporting unit is a relatively new business resulting from an acquisition in 2017 and also fell short of internal financial expectations in 2019.
For our qualitative assessment, of the Healthcare, Education, Business Advisory and Life Sciences reporting units, we considered the most recent quantitative analysis performed for theseeach reporting units,unit, which was as of November 30, 2017,January 1, 2022, including the key assumptions used within that analysis, the indicated fair values, and the amount by which those fair values exceeded their carrying amounts. One of the key assumptions used within the prior quantitative analysis was our internal financial projections; therefore, we considered the actual performance of each reporting unit during 2019 and 20182022 compared to the internal financial projections used, as well as specific outlooks for each reporting unit based on our most recent internal financial projections. We also considered the market-based valuation multiples used in the market approach within our prior quantitative analysis, which were derived from guideline companies, and noted that the valuation multiples generally increased compared to November 30, 2017. We also reviewed the current carrying value of each reporting unit in comparison to the carrying values as of the prior quantitative analysis. In addition, we considered various factors, including macroeconomic conditions, relevant industry and market trends for each reporting unit, and other entity-specific events, that could indicate a potential change in the fair value of our reporting units or the composition of their carrying values. Based on our assessments, we determined that it was more likely than not that the fair values for each of the Healthcare, Education, Business Advisory and Life Sciencesour reporting units exceeded their respective carrying amounts. As such, the goodwill for theseour reporting units was not considered impaired as of November 30, 2019,2022, and a quantitative goodwill impairment analysis was not necessary.
The qualitative assessment of our reporting units requires us to make significant judgments, estimates, and assumptions. While we believe that the estimates and assumptions underlying our analysis are reasonable, there is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in non-cash goodwill impairment charges.
For the Strategy and Innovation reporting unit, we reviewed goodwill for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. In estimating the fair value of the reporting unit, we relied on a combination of the income approach and the market approach utilizing the guideline company method, with a fifty-fifty weighting. Based on the results of the goodwill impairment test,

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we determined the fair value of the Strategy and Innovation reporting unit exceeded its carrying value by 41%. As such, we concluded that there was no indication of goodwill impairment for the reporting unit.

In the income approach used to calculate the fair value of the Strategy and Innovation reporting unit, we utilized a discounted cash flow analysis, which involves estimating the expected after-tax cash flows that will be generated by the reporting unit and then discounting those cash flows to present value reflecting the relevant risks associated with the reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, such as long-term projections of future cash flows, including estimates of revenues and operating margins; market conditions; tax rates; and discount rates reflecting the risk inherent in future cash flows. In estimating future cash flows, we relied on internally generated forecasts based on historical experience, current backlog, expected market demand, and other industry information, and assumed a long-term annual revenue growth rate of 3.0%. Our discounted cash flow analysis assumed a weighted average cost of capital discount rate of 14.0% for the Strategy and Innovation reporting unit.

In the market approach, we utilized the guideline company method, which involved calculating valuation multiples based on operating data from guideline publicly traded companies. Multiples derived from guideline companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. For the Strategy and Innovation reporting unit, these multiples are evaluated and adjusted based on specific characteristics of the reporting unit relative to the selected guideline companies and applied to the reporting unit's operating data to arrive at an indication of value.

Determining the fair value of the Strategy and Innovationany reporting unit requires us to make significant judgments, estimates, and assumptions. While we believe that the estimates and assumptions underlying our valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether or not a non-cash goodwillan impairment charge is recognized and also the magnitude of any such charge. The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will continue to monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations compared to our internal forecasts could result in non-cashadditional goodwill impairment charges.

charges, which could be material.
The table below presents, based on the quantitative goodwill impairment test performed as of November 30, 2019, the decrease in the faircarrying value of the Strategy and Innovation reporting unit given a 100 basis point increase in the assumed discount rate or a 100 basis point decrease in the assumed long-term annual revenue growth rate.
 Discount rate increased by 100 bpsLong-term growth rate decreased by 100 bps
Strategy and Innovation:  
     Decrease in fair value$(5,600)$(3,600)
     Percentage by which fair value exceeds carrying value35%37%
The carrying values of goodwill for each of our reporting units as of December 31, 2019 are2022 is as follows (in thousands):
Reporting Unit 
Carrying Value
of Goodwill
Healthcare $428,729
Education 103,889
Business Advisory 16,094
Strategy and Innovation 87,410
Life Sciences 10,558
Enterprise Solutions and Analytics —
Total $646,680
Reporting UnitCarrying Value
of Goodwill
Healthcare$454,214 
Education122,235 
Commercial48,517 
Total$624,966 
Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill. Our intangible assets, net of accumulated amortization, totaled $31.6$23.4 million at December 31, 20192022 and primarily consist of customer relationships, trade names, technology and software, trade names, and non-competition agreements, and customer contracts, all of which were acquired through business combinations. We evaluate our
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intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. No material impairment charges for intangible assets were recorded in 2019.

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2022.
Income Taxes
Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. In determining our provision for income taxes on an interim basis, we estimate our annual effective tax rate based on information available at each interim period. Changes in applicable U.S. state, federal or foreign tax laws and regulations, or their interpretation and application, could materially affect our tax expense.
Deferred tax assets and liabilities are recorded for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in management’s opinion, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Factors considered in making this determination include the period of expiration of the tax asset, planned use of the tax asset, tax planning strategies and historical and projected taxable income as well as tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances will be subject to change in each future reporting period as a result of changes in one or more of these factors.
Our tax positions are subject to income tax audits by federal, state, local, and foreign tax authorities. A tax benefit from an uncertain position may be recognized in the financial statements only if it is more likely than not that the position is sustainable, based on its technical merits. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. We believe that positions taken on our tax returns are fully supported. However, final determinations of prior year tax positions upon settlement with the taxing authority could be materially different from estimates. The outcome of these final determinations could have a material impact on our provision for taxes, net income, or cash flows in the period in which that determination is made.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 2 “Summary of Significant Accounting Policies" within the notes to the consolidated financial statements for information on new accounting pronouncements.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates and changes in the market value of our investments. We use certain derivative instruments to hedge a portion of the interest rate and foreign currency exchange rate risks.
Market Risk and Interest Rate Risk
Concurrent with the issuance of our Convertible Notes, we entered into separate convertible note hedge and warrant transactions. The convertible note hedge transactions were intended to reduce the potential future economic dilution associated with the conversion of the Convertible Notes and, combined with the warrants, effectively raised the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share. Under the convertible note hedge transactions, we had the option to purchase a total of approximately 3.1 million shares of our common stock, which was the number of shares initially issuable upon conversion of the Convertible Notes in full, at a price of approximately $79.89, which corresponds to the initial conversion price of the Convertible Notes, subject to customary anti-dilution adjustments substantially similar to those in the Convertible Notes. The convertible note hedge transactions expired in the third quarter of 2019. Under the warrant transactions, the holders of the warrants have the option to purchase a total of approximately 3.1 million shares of our common stock at a price of approximately $97.12. If the average market value per share of our common stock for the reporting period exceeds the strike price of the warrants, the warrants will have a dilutive effect on our earnings per share. The warrants will expire incrementally on 100 different dates from January 6, 2020 to May 28, 2020 and are exercisable at each such expiry date. See Note 7 “Financing Arrangements” within the notes to the consolidated financial statements for additional information on our Convertible Notes, which matured on October 1, 2019.
We have exposure to changes in interest rates associated with borrowings under our banksenior secured credit facility, which has variable interest rates tied to LIBORTerm SOFR or an alternate base rate, at our option. At December 31, 2019,2022, we had borrowings outstanding under the credit facility totaling $205.0$290.0 million that carried a weighted average interest rate of 3.0%3.8% including the impact of the interest rate swapswaps described below. A hypothetical 100 basis point change in the interest rate as of December 31, 2022 would have a $1.6$0.9 million effect on our pretax income on an annualized basis, including the effect of the interest rate swap.swaps. At December 31, 2018, our2021, we had borrowings outstanding under the credit facility totaled $50.0totaling $230.0 million whichthat carried a weighted average interest rate of 3.7%2.7%, including the effectimpact of the interest rate swap described below. As of December 31, 2018, these variable rate borrowings were fully hedged against changes in interest rates by the interest rate swap, which had a notional amount of $50.0 million as of December 31, 2018.swaps. A hypothetical 100 basis point change in the interest rate would have had a $0.3 million effect on our full year pretax income, including the effect of the interest rate swaps and our borrowings outstanding as of December 31, 2018, would have had no impact on our consolidated financial statements.2021.
On June 22, 2017, we enteredWe enter into a forward interest rate swap agreement effective August 31, 2017 and ending August 31, 2022, with a notional amount of $50.0 million. We entered into this derivative instrumentagreements to hedge against the interest rate risks of our variable-rate borrowings. Under the terms of the interest rate swap agreement, we receive from the counterparty interest on the notional amount based on one-month LIBORone month Term SOFR and we pay to the counterparty a stated, fixed rate. As of December 31, 2022 and December 31, 2021, the aggregate notional amount of our forward interest rate swap agreements was $200.0 million. The outstanding interest rate swap agreements as of 1.900%.December 31, 2022 are scheduled to mature on a staggered basis through August 31, 2027.
Foreign Currency Risk
We also have exposure to changes in interestforeign currency exchange rates associated withbetween the promissory note assumedU.S. Dollar (USD) and the Indian Rupee (INR) related to our operations in India. We hedge a portion of our cash flow exposure related to our INR-denominated intercompany expenses by entering into non-deliverable foreign exchange forward contracts. These foreign exchange forward contracts have an aggregate notional amount of INR
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657.9 million, or $8.0 million based on June 30, 2017the exchange rate in connection with our purchaseeffect as of an aircraft, which has variable interest rates tied to LIBOR. At December 31, 2019,2022, and are scheduled to mature monthly through September 2023.
We use a sensitivity analysis to determine the outstanding principal amounteffects that market foreign currency exchange rate fluctuations may have on the fair value of our foreign currency exchange rate hedge portfolio. The sensitivity of the promissory note was $3.9 million and carried an interest ratehedge portfolio is computed based on the market value of 3.7%. Afuture cash flows as affected by changes in exchange rates. This sensitivity analysis represents the hypothetical 100 basis point changechanges in this interest rate would not

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have a material effect on our pretax income. At December 31, 2018 the outstanding principal amountvalue of the promissory note was $4.4 millionhedge position and carried an interest rate of 4.3%.does not reflect the offsetting gain or loss on the underlying exposure. A hypothetical 100 basis point change in the interestforeign currency exchange rate between the USD and INR would have an immaterial impact on the fair value of our hedge instruments as of December 31, 2018 would not have had a material effect on our pretax income.2022.
We do not use derivative instruments for trading or other speculative purposes. From time to time, we invest excess cash in short-term marketable securities. These investments principally consist of overnight sweep accounts. Due to the short maturity of these investments, we have concluded that we do not have material market risk exposure.Market Risk
We have a non-interest bearing1.69% convertible debt investment in Shorelight Holdings, LLC, a privately-held company, which we account for as an available-for-sale debt security. As such, the investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. As of December 31, 2019,2022, the fair value of the investment was $49.5$57.6 million, with a total cost basis of $27.9$40.9 million. At December 31, 2018,2021, the fair value of the investment was $50.4$65.9 million, with a total cost basis of $27.9$40.9 million.
We have a preferred stock investment in Medically Home Group, Inc. ("Medically Home"), a privately-held company, which we account for as an equity security without a readily determinable fair value using the measurement alternative. As such, the investment is carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment. Any unrealized holding gains and losses resulting from observable price changes are recorded in our consolidated statement of operations. As of December 31, 2019,2022, the carrying value of the investment was $33.6 million, with a total cost basis of $5.0 million. As of December 31, 2021, the carrying value of the investment was $6.7 million, with a total cost basis of $5.0 million. During the first quarter of 2022, we recognized an unrealized gain of $27.0 million on our preferred stock investment resulting from an observable price change of preferred stock with similar rights and preferences to our preferred stock investment issued by Medically Home. Following our purchase, there has been nowe have not identified any impairment nor any observable price changesof our investment.
We do not use derivative instruments for trading or other speculative purposes. From time to time, we invest excess cash in short-term marketable securities. These investments principally consist of overnight sweep accounts. Due to the short maturity of these investments, we have concluded that we do not have material market risk exposure. Refer to Note 12 “Derivative Instruments and Hedging Activity” within the notes to our investment. See Note 13 “Fair Value of Financial Instruments”consolidated financial statements for furtheradditional information on our long-term investments.derivative instruments.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company’s Consolidated Financial Statements and supplementary data begin on page F-1 of this Annual Report on Form 10-K.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2019.2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2019,2022, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports we file or submit under the Exchange Act, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company. Internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and effected by the Company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
(i)Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(ii)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(iii)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

(i)Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
37
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(ii)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(iii)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In connection with the preparation of this report, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the internal control over financial reporting as of December 31, 20192022 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013). As a result of that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2019.2022.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 20192022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing on page F-2 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 20192022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.OTHER INFORMATION.
None.
ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors, Executive Officers, Promoters and Control Persons
The information required by this item is incorporated by reference from portions of our definitive proxy statement for our annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A by April 29, 2020May 1, 2023 (the “Proxy Statement”) under “Nominees to Board of Directors,” “Directors Not Standing For Election” and “Executive Officers.”
Compliance with Section 16(a) of the Exchange Act
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Section“Delinquent Section 16(a) Beneficial Ownership Reporting Compliance.Reports.”
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics (the “Code”) that is applicable to all of our employees, officers and directors. The Code is available on the Corporate Governance page of our website at ir.huronconsultinggroup.com.ir.huronconsultinggroup.com. If we make any amendments to or grant any waivers from the Code which are required to be disclosed pursuant to the Securities Exchange Act of 1934, we will make such disclosures on our website.
Corporate Governance
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Board Meetings and Committees.”
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ITEM 11.EXECUTIVE COMPENSATION.
Executive Compensation
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Executive Compensation.”
Compensation Committee Interlocks and Insider Participation
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Compensation Committee Interlocks and Insider Participation.”

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Compensation Committee Report
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Compensation Committee Report.”
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table summarizes information with respect to equity compensation plans approved by shareholders as of December 31, 2019.2022. We do not have equity compensation plans that have not been approved by shareholders.
Plan CategoryNumber of Shares
to be Issued Upon
Exercise of
Outstanding Options		Weighted Average
Exercise Price of
Outstanding Options
Number of Shares
Remaining Available
for Future Issuance
(excluding shares in
1st column)
Equity compensation plans approved by shareholders:
2012 Omnibus Incentive Plan (1)
227,116 $48.89 590,383 
Stock Ownership Participation Program (2)
— N/A199,991 
Equity compensation plans not approved by shareholdersN/AN/AN/A
Total227,116 $48.89 790,374 
Plan Category
Number of Shares
to be Issued Upon
Exercise of
Outstanding Options
 
Weighted Average
Exercise Price of
Outstanding Options
 
Number of Shares
Remaining Available
for Future Issuance
(excluding shares in
1st column)
Equity compensation plans approved by shareholders:     
2004 Omnibus Stock Plan (1)
74,608
 $29.74
 —
2012 Omnibus Incentive Plan (2)
31,785
 $39.19
 1,073,349
Stock Ownership Participation Program (3)
—
 $—
 33,497
Equity compensation plans not approved by shareholdersN/A
 N/A
 N/A
Total106,393
 $32.57
 1,106,846
(1)Our 2012 Omnibus Incentive Plan was approved by our shareholders at our annual meeting held on May 1, 2012. Subsequent to the initial approval and through December 31, 2022, our shareholders have approved amendments to the 2012 Omnibus Incentive Plan to increase the number of shares authorized for issuance to 4.6 million shares, in the aggregate.
(1)Our 2004 Omnibus Stock Plan was approved by the existing shareholders prior to our initial public offering. Upon adoption of the 2012 Omnibus Incentive Plan, we terminated the 2004 Omnibus Stock Plan with respect to future awards and no further awards will be granted under this plan.
(2)Our 2012 Omnibus Incentive Plan was approved by our shareholders at our annual meeting held on May 1, 2012. Subsequent to the initial approval and through December 31, 2019, our shareholders have approved amendments to the 2012 Omnibus Incentive Plan to increase the number of shares reserved for issuance by 2,254,000, in the aggregate.
(3)Our Stock Ownership Participation Program was approved by our shareholders at our annual meeting held on May 1, 2015.
(2)Our Stock Ownership Participation Program was approved by our shareholders at our annual meeting held on May 1, 2015. Subsequent to the initial approval and through December 31, 2022, our shareholders have approved amendments to the Stock Ownership Participation Program to increase the number of shares authorized for issuance to 0.7 million shares, in the aggregate.
Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Stock Ownership of Certain Beneficial Owners and Management.”
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Certain Relationships and Related Transactions
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Certain Relationships and Related Transactions.”
Director Independence
The information required by this item is incorporated by reference from portions of the Proxy Statement under “Nominees to Board of Directors,” “Directors Not Standing For Election,” and “Board Meetings and Committees.”
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ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this item is incorporated by reference from a portion of the Proxy Statement under “Audit and Non-Audit Fees.”

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PART IV
 
ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Documents filed as part of this Annual Report on Form 10-K.
1.Financial Statements—Our independent registered public accounting firm’s report and our Consolidated Financial Statements are listed below and begin on page F-1 of this Form 10-K.
1.Financial Statements—Our independent registered public accounting firm’s report and our Consolidated Financial Statements are listed below and begin on page F-1 of this Form 10-K.
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Other Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
2.Financial Statement Schedules—The financial statement schedules required by this item are included in the Consolidated Financial Statements and accompanying notes.
3.Exhibit Index
Exhibit
Number		Exhibit DescriptionFiled
herewith		Furnished
herewith		Incorporated by Reference
FormPeriod
Ending		ExhibitFiling Date
3.110-K12/31/20043.12/16/2005
3.28-K3.111/2/2022
4.1S-1
(File No. 333-
115434)		4.110/5/2004
4.210-K12/31/20194.22/26/2020
10.1S-1
(File No. 333-
115434)		10.110/5/2004
10.2*10-K12/31/200810.122/24/2009
10.3*8-K10.11/6/2017
10.410-K12/31/201210.172/21/2013
10.510-K12/31/201210.182/21/2013
10.610-K12/31/201210.192/21/2013
10.78-K10.11/4/2013
10.8†
10-K12/31/201910.132/26/2020
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Exhibit
Number		Exhibit DescriptionFiled
herewith		Furnished
herewith		Incorporated by Reference
FormPeriod
Ending		ExhibitFiling Date
10.98-K10.110/16/2019
10.10*10-K12/31/201210.202/21/2013
10.11*10-K12/31/201410.322/24/2015
10.12*10-K12/31/201410.332/24/2015
10.13*10-K12/31/201410.342/24/2015
10.14*10-K12/31/201910.342/26/2020
10.15*10-Q3/31/202010.14/30/2020
10.16*DEF 14AAppendix A3/26/2020
10.17*8-K10.14/14/2021
10.18*DEF 14AAppendix A3/26/2021
10.19*10-Q9/30/202110.111/2/2021
10.20*8-K10.16/7/2022
10.21†
8-K10.111/16/2022
10.228-K10.211/16/2022
10.238-K10.311/16/2022
10.24*8-K/A10.112/29/2022
10.25*8-K/A10.212/29/2022
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2.Exhibit
Number		Financial Statement Schedules—The financial statement schedules requiredExhibit DescriptionFiled
herewith		Furnished
herewith		Incorporated by this item are included in the Consolidated Financial Statements and accompanying notes.Reference
FormPeriod
Ending		ExhibitFiling Date
10.26*X
3.21.1X
23.1X
31.1X
31.2X
32.1X
32.2X
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit Index101)
Exhibit
Number
Exhibit Description
Filed
herewith
Furnished
herewith
Incorporated by Reference
Form
Period
Ending
ExhibitFiling Date
3.1
Third Amended and Restated Certificate of Incorporation of Huron Consulting Group Inc.
  10-K12/31/20043.12/16/2005
3.2
Amended and Restated Bylaws of Huron Consulting Group Inc.
  8-K 3.110/28/2015
4.1
Specimen Stock Certificate.
  
S-1
(File No. 333-
115434)
 4.110/5/2004
4.2
Description of Securities.
X     
4.3
Indenture (including Form of Note) with respect to the Company’s 1.25% Convertible Senior Notes due 2019, dated as of September 10, 2014, between Huron Consulting Group Inc. and U.S. Bank National Association, as trustee.
  8-K 4.19/16/2014
10.1
Office Lease, dated December 2003, between Union Tower, LLC and Huron Consulting Services LLC (formerly known as Huron Consulting Group LLC).
  
S-1
(File No. 333-
115434)
 10.110/5/2004
10.2*
Amended and Restated Huron Consulting Group Inc. 2004 Omnibus Stock Plan.
  S-8 10.15/5/2010
10.3*
Huron Consulting Group Inc. Deferred Compensation Plan as Amended and Restated effective January 1, 2009.
  10-K12/31/200810.122/24/2009
10.4*
Senior Management Agreement by and between Huron Consulting Group Inc. and John D. Kelly.
  8-K 10.11/6/2017
10.5*
Amended and Restated Senior Management Agreement by and between Huron Consulting Group Inc. and James H. Roth.
  8-K 10.21/6/2017
10.6*
Senior Management Agreement by and between Huron Consulting Group Inc. and C. Mark Hussey.
  8-K 10.31/6/2017
10.7*
Senior Management Agreement by and between Huron Consulting Group Inc. and Diane E. Ratekin.
  8-K 10.41/6/2017
10.8*
Transitional Retirement Agreement by and between Huron Consulting Group Inc. and Diane E. Ratekin.
  8-K 10.19/16/2019

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Exhibit
Number
Exhibit Description
Filed
herewith
Furnished
herewith
Incorporated by Reference
Form
Period
Ending
ExhibitFiling Date
10.9
First Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated August 23, 2004.
  10-K12/31/201210.172/21/2013
10.10
Second Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated March 14, 2007.
  10-K12/31/201210.182/21/2013
10.11
Third Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated April 2, 2010.
  10-K12/31/201210.192/21/2013
10.12
Fourth Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated December 31, 2012.
  8-K 10.11/4/2013
10.13†
Fifth Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated December 1, 2013.
X     
10.14
Sixth Amendment to Lease by and between Huron Consulting Services LLC and Onni Van Buren Chicago LLC, dated October 3, 2019.
  8-K 10.110/16/2019
10.15*
Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Restricted Stock Agreement.
  10-K12/31/201210.202/21/2013
10.16
Base Convertible Bond Hedge Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A.
  8-K 10.29/5/2014
10.17
Base Convertible Bond Hedge Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch.
  8-K 10.39/5/2014
10.18
Base Issuer Warrant Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A.
  8-K 10.49/5/2014
10.19
Base Issuer Warrant Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch.
  8-K 10.59/5/2014
10.20
Additional Convertible Bond Hedge Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A.
  8-K 10.19/16/2014
10.21
Additional Convertible Bond Hedge Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch.
  8-K 10.29/16/2014
10.22
Additional Issuer Warrant Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A.
  8-K 10.39/16/2014
10.23
Additional Issuer Warrant Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch.
  8-K 10.49/16/2014

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Exhibit
Number
Exhibit Description
Filed
herewith
Furnished
herewith
Incorporated by Reference
Form
Period
Ending
ExhibitFiling Date
10.24*
Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Restricted Stock Agreement (Stock Ownership Participation Program).
  10-K12/31/201410.312/24/2015
10.25*
Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Performance Stock Unit Agreement.
  10-K12/31/201410.322/24/2015
10.26*
Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Stock Option Agreement.
  10-K12/31/201410.332/24/2015
10.27*
Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan NEO Performance Stock Unit Agreement.
  10-K12/31/201410.342/24/2015
10.28
Second Amended and Restated Credit Agreement, dated as of March 31, 2015, among Huron Consulting Group Inc., as Borrower, certain subsidiaries as Guarantors, the Lenders Party Hereto and Bank of America, N.A., as Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, PNC Bank, Bank of Montreal and Key Bank National Association as Co-Documentation Agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Book Managers.
  8-K 10.14/2/2015
10.29
Second Amended and Restated Security Agreement, dated as of March 31, 2015.
  8-K 10.24/2/2015
10.30
Second Amended and Restated Pledge Agreement, dated as of March 31, 2015.
  8-K 10.34/2/2015
10.31*
Huron Consulting Group Inc. Stock Ownership Participation Program.
  DEF 14A Appendix A3/20/2015
10.32*
Huron Consulting Group Inc. 2012 Omnibus Incentive Plan, as amended and restated effective May 1, 2017.

  DEF 14A Appendix A3/27/2017
10.33*
Amendment to the Huron Consulting Group Inc. Amended and Restated 2012 Omnibus Incentive Plan.
  DEF 14A Appendix A3/22/2019
10.34*
Huron Consulting Group Inc. 2012 Omnibus Incentive Plan, as amended and restated effective February 13, 2020.
X     
10.35
Amendment No. 1 of the Second Amended and Restated Credit Agreement, dated as of February 28, 2017, by and among Huron Consulting Group Inc., as Borrower, certain subsidiaries, as Guarantors, and Bank of America, N.A., as Administrative Agent for and on behalf of the Lenders.

  8-K 10.13/6/2017
10.36
Amendment No. 2 of the Second Amended and Restated Credit Agreement, dated as of October 24, 2017, by and among Huron Consulting Group Inc., as Borrower, certain subsidiaries, as Guarantors, and Bank of America, N.A., as Administrative Agent for and on behalf of the Lenders.
  10-Q9/30/201710.111/1/2017
10.37
Amendment No. 3 of the Credit Agreement, dated as of March 23, 2018, by and among Huron Consulting Group Inc., as Borrower, certain subsidiaries, as Guarantors, and Bank of America, N.A., as Administrative Agent for and on behalf of the Lenders.
  8-K 10.13/29/2018

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Exhibit
Number
Exhibit Description
Filed
herewith
Furnished
herewith
Incorporated by Reference
Form
Period
Ending
ExhibitFiling Date
10.38
Amendment No. 4 of the Credit Agreement, the Pledge Agreement and the Security Agreement, dated as of September 27, 2019, by and among Huron Consulting Group Inc., as Borrower, certain subsidiaries, as Guarantors, and Bank of America, N.A., as Administrative Agent for and on behalf of the Lenders.
  8-K 10.110/3/2019
21.1
List of Subsidiaries of Huron Consulting Group Inc.
X     
23.1
Consent of PricewaterhouseCoopers LLP.
X     
31.1
Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X     
31.2
Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X     
32.1
Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 X    
32.2
Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 X    
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X     
101.SCHInline XBRL Taxonomy Extension Schema DocumentX     
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX     
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX     
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX     
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX     
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X     
X
*
*Indicates the exhibit is a management contract or compensatory plan or arrangement.
†
Pursuant to Regulation S-K 601(b)(10)(iv), certain exhibits to this Exhibit have been omitted. The Company agrees to furnish supplementally to the Securities and Exchange Commission, upon its request, a copy of any or all omitted exhibits.
ITEM 16.FORM 10-K SUMMARY
Not applicable.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Huron Consulting Group Inc.
(Registrant)
SignatureTitleDate
/s/    JAMES H. ROTHC. MARK HUSSEYPresident, Chief Executive Officer and Director2/25/202028/2023
James H. RothC. Mark Hussey
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints James H. Roth,C. Mark Hussey, John D. Kelly, and Diane Ratekin,Ernest W. Torain, Jr., and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all and any other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
 
SignatureTitleDate
/s/    JAMES H. ROTH    C. MARK HUSSEY    
President, Chief Executive Officer and Director
(Principal Executive Officer)
2/25/202028/2023
    James H. RothC. Mark Hussey
/s/    JOHN F. MCCARTNEY        Non-Executive Chairman of the Board2/25/202028/2023
John F. McCartney
/s/    GEORGE E. MASSARO       JAMES H. ROTHVice Chairman of the Board2/25/202028/2023
George E. MassaroJames H. Roth
/s/    JOHN D. KELLY  
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
2/25/202028/2023
John D. Kelly
/s/    ELLEN P. WONGKYLE D. FEATHERSTONE
Chief Accounting Officer (Principal Accounting Officer)
2/25/202028/2023
Ellen P. WongKyle D. Featherstone
/s/    JOY T. BROWNDirector2/28/2023
Joy T. Brown
/s/    H. EUGENE LOCKHART Director2/25/202028/2023
H. Eugene Lockhart
/s/    PETER K. MARKELLDirector2/28/2023
Peter K. Markell
/s/   HUGH E. SAWYERDirector2/25/202028/2023
Hugh E. Sawyer
/s/    EKTA SINGH-BUSHELLDirector2/25/202028/2023
Ekta Singh-Bushell
/s/    DEBRA ZUMWALTDirector2/25/202028/2023
Debra Zumwalt


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HURON CONSULTING GROUP INC.
CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Page
Report of Independent Registered Public Accounting Firm
(PCAOB ID 238)		F-2
Consolidated Balance Sheets at December 31, 20192022 and 20182021F-3F-4
Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the years ended December 31, 2019, 2018,2022, 2021, and 20172020F-4F-5
F-5F-6
F-6F-7
F-7F-8

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Huron Consulting Group Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Huron Consulting Group Inc. and its subsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, and the related consolidated statements of operations and other comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2019,2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20192022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.
Changes in Accounting Principles
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases as of January 1, 2019 and the manner in which it accounts for revenue from contracts with customers as of January 1, 2018.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Overover Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit mattersmatter communicated below are mattersis a matter arising from the current period audit of the consolidated financial statements that werewas communicated or required to be communicated to the audit committee and that (i) relaterelates to accounts or disclosures that are material to theconsolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of
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critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit mattersmatter below, providing a separate opinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.

it relates.
Revenue Recognition -– Fixed-Fee and Healthcare Performance-Based Billing Arrangements

As described in NotesNote 2 and 19 to the consolidated financial statements, in fixed-fee billing arrangements, which accounted for $401.9 millionmakes up a portion of total revenues of $1.13 billion for the year ended December 31, 2019,2022, the Company agrees to a pre-established fee in exchange for a predetermined set of professional services. As disclosed by management, under fixed-fee arrangements, revenues are recognized based upon work completed to date versus management’s estimates of the total services to be provided under the engagement. Additionally, the Company’s Healthcare practice enters into performance-based billing arrangements whereby fees are tied to the attainment of contractually defined objectives, as a result of adopting the Company’s recommendations, which accounted for $71.1 millionmakes up a portion of total revenues of $1.13 billion for the year ended December 31, 2019.2022. Under performance-based billing arrangements, revenue is recognized based on an estimate of variable consideration and work completed to date versus the estimates of the total services to be provided under the engagement. Variable consideration is estimated based on a probability-weighted assessment of the fees to be earned, net of a constraint to limit the amount that could be reversed when the uncertainty is resolved.

The principal considerations for our determination that performing procedures relating to revenue recognition under fixed-fee and healthcareHealthcare performance-based billing arrangements is a critical audit matter are there wasthe significant judgmentjudgments by management when developing theirthe estimates of revenue to be recognized fromfor these billing arrangements. Thisarrangements, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s significant assumptions includingrelated to work completed to date versus management’s estimates of the total services to be provided for fixed-fee and performance-based billing arrangements and the probability of attaining contractually defined objectives in performance-based billing arrangements.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process under fixed-fee and performance-based billing arrangements.These procedures alsoincluded, among others, testing the accuracy of the total contract amounts and evaluating the reasonableness of management’s assumption of work completed to-date versus management’s estimates of the total services to be provided by (i) inquiring with the Company’s employees regarding the expected remaining efforts for a sample of engagements, (ii) evaluating trends in past performance, and (iii) evaluating performance to date. Additionally, for performance-based billing arrangements, procedures included, among others (i) evaluating the reasonableness of management’s assumption of the probability of attaining the contractually defined objectives by inquiring with the Company’s employees regarding the expected remaining efforts and the probability weighting of variable consideration to be earned for a sample of engagements and by evaluating trends in past performance, (ii) evaluating the necessity of applying a constraint based upon consideration of the initial forecasts developed during project procurement, and (iii) evaluating performance to date towards the attainment of contractually defined objectives.

Goodwill Impairment Assessment - Strategy and Innovation Reporting Unit
As described in Notes 2 and 4 to the consolidated financial statements, the Company’s consolidated goodwill balance was $646.7 million as of December 31, 2019, of which $87.4 million is attributed to the Strategy and Innovation reporting unit. Management conducts an annual goodwill impairment test as of November 30, and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. As disclosed by management, in performing the analysis, management first assesses qualitative factors to determine whether the existence of current events or circumstances would lead to a determination that it is more likely than not that the fair value of one of the reporting units is greater than its carrying value. If management determines it is more likely than not that the fair value of a reporting unit is greater than its carrying value, no further testing is necessary. However, if management concludes otherwise, a quantitative impairment test is performed by calculating the fair value of the reporting unit and comparing the fair value with the carrying value of the reporting unit, including goodwill. Fair value is estimated using a combination of the income approach, utilizing a discounted cash flow analysis, and the market approach, utilizing the guideline company method, with a fifty-fifty weighting. The determination of fair value using the income approach requires the use of significant estimates and assumptions, including long-term projections of future cash flows, estimated revenues, operating margin, market conditions, tax rates, and discount rates. The determination of fair value using the market approach requires the

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use of valuation multiples based on operating data from guideline publicly traded companies. If the fair value of the reporting unit is less than its carrying value, a non-cash impairment charge is recorded in an amount equal to that difference with the loss not to exceed the total amount of goodwill allocated to the reporting unit.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Strategy and Innovation reporting unit is a critical audit matter are there was significant judgment by management when developing the fair value measurement of the reporting unit. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management's cash flow projections and significant assumptions, including estimated revenues, operating margin, discount rate, and market multiples. In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s annual goodwill impairment test, including controls over the determination of the fair value of the Strategy and Innovation reporting unit. These procedures also included, among others, testing management’s process for developing the fair value estimate; evaluating the allocation of assets to the reporting unit; evaluating the appropriateness of the income and market approaches; testing the completeness, accuracy and relevance of underlying data used in the income approach; testing the reasonableness and accuracy of the underlying data used in the market approach; and evaluating the significant assumptions used by management, including estimated revenues, operating margin, discount rate, and market multiples. Evaluating management’s assumptions related to estimated revenues, operating margin, discount rate, and market multiples involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the actions necessary to achieve future forecasts, (iii) the consistency with external market and industry data, and (iv) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the discounted cash flow analysis and certain significant assumptions, including the discount rate, as well as the selection and calculation of market multiples.
  
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 25, 202028, 2023

We have served as the Company's auditor since 2002.

F-3
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HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
 
December 31, 2019 December 31, 2018December 31, 2022December 31, 2021
Assets   Assets
Current assets:   Current assets:
Cash and cash equivalents$11,604
 $33,107
Cash and cash equivalents$11,834 $20,781 
Receivables from clients, net116,571
 109,677
Unbilled services, net79,937
 69,613
Receivables from clients, net of allowances of $10,600 and $8,827, respectivelyReceivables from clients, net of allowances of $10,600 and $8,827, respectively147,852 122,316 
Unbilled services, net of allowances of $3,850 and $2,637, respectivelyUnbilled services, net of allowances of $3,850 and $2,637, respectively141,781 91,285 
Income tax receivable2,376
 6,612
Income tax receivable960 8,071 
Prepaid expenses and other current assets14,248
 13,922
Prepaid expenses and other current assets26,057 15,229 
Total current assets224,736
 232,931
Total current assets328,484 257,682 
Property and equipment, net38,413
 40,374
Property and equipment, net26,107 31,004 
Deferred income taxes, net1,145
 2,153
Deferred income taxes, net1,554 1,804 
Long-term investments54,541
 50,429
Long-term investments91,194 72,584 
Operating lease right-of-use assets54,954
 —
Operating lease right-of-use assets30,304 35,311 
Other non-current assets52,177
 30,525
Other non-current assets73,039 68,191 
Intangible assets, net31,625
 47,857
Intangible assets, net23,392 31,894 
Goodwill646,680
 645,263
Goodwill624,966 620,879 
Total assets$1,104,271
 $1,049,532
Total assets$1,199,040 $1,119,349 
Liabilities and stockholders’ equity   Liabilities and stockholders’ equity
Current liabilities:   Current liabilities:
Accounts payable$7,944
 $10,020
Accounts payable$14,254 $13,621 
Accrued expenses and other current liabilities18,554
 17,207
Accrued expenses and other current liabilities27,268 22,519 
Accrued payroll and related benefits141,605
 109,825
Accrued payroll and related benefits171,723 139,131 
Accrued contingent consideration for business acquisitions—
 9,991
Current maturities of long-term debt529
 243,132
Current maturities of long-term debt— 559 
Current maturities of operating lease liabilities7,469
 —
Current maturities of operating lease liabilities10,530 10,142 
Deferred revenues28,443
 28,130
Deferred revenues21,909 19,212 
Total current liabilities204,544
 418,305
Total current liabilities245,684 205,184 
Non-current liabilities:   Non-current liabilities:
Deferred compensation and other liabilities28,635
 20,875
Deferred compensation and other liabilities33,614 43,458 
Accrued contingent consideration for business acquisitions, net of current portion—
 1,450
Long-term debt, net of current portion208,324
 53,853
Long-term debt, net of current portion290,000 232,221 
Operating lease liabilities, net of current portion69,233
 —
Operating lease liabilities, net of current portion45,556 54,313 
Deferred lease incentives—
 13,693
Deferred income taxes, net8,070
 732
Deferred income taxes, net32,146 12,273 
Total non-current liabilities314,262
 90,603
Total non-current liabilities401,316 342,265 
Commitments and contingencies

 

Commitments and contingencies
Stockholders’ equity   Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 25,144,764 and 25,114,739 shares issued at December 31, 2019 and December 31, 2018, respectively247
 244
Treasury stock, at cost, 2,425,430 and 2,568,288 shares at December 31, 2019 and December 31, 2018, respectively(128,348) (124,794)
Common stock; $0.01 par value; 500,000,000 shares authorized; 22,507,159 and 24,364,814 shares issued, respectivelyCommon stock; $0.01 par value; 500,000,000 shares authorized; 22,507,159 and 24,364,814 shares issued, respectively223 239 
Treasury stock, at cost, 2,711,712 and 2,495,172 shares, respectivelyTreasury stock, at cost, 2,711,712 and 2,495,172 shares, respectively(137,556)(135,969)
Additional paid-in capital460,781
 452,573
Additional paid-in capital318,706 413,794 
Retained earnings237,849
 196,106
Retained earnings352,548 276,996 
Accumulated other comprehensive income14,936
 16,495
Accumulated other comprehensive income18,119 16,840 
Total stockholders’ equity585,465
 540,624
Total stockholders’ equity552,040 571,900 
Total liabilities and stockholders’ equity$1,104,271
 $1,049,532
Total liabilities and stockholders’ equity$1,199,040 $1,119,349 
The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
 
Year Ended December 31, Year Ended December 31,
2019 2018 2017 202220212020
Revenues and reimbursable expenses:     Revenues and reimbursable expenses:
Revenues$876,757
 $795,125
 $732,570
Revenues$1,132,455 $905,640 $844,127 
Reimbursable expenses88,717
 82,874
 75,175
Reimbursable expenses26,506 21,318 26,887 
Total revenues and reimbursable expenses965,474
 877,999
 807,745
Total revenues and reimbursable expenses1,158,961 926,958 871,014 
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses):
     
Direct costs575,602
 521,537
 454,806
Amortization of intangible assets and software development costs5,375
 4,247
 10,932
Operating expenses:Operating expenses:
Direct costs (exclusive of depreciation and amortization included below)Direct costs (exclusive of depreciation and amortization included below)785,881 636,776 592,428 
Reimbursable expenses88,696
 82,923
 75,436
Reimbursable expenses26,671 21,369 26,918 
Total direct costs and reimbursable expenses669,673
 608,707
 541,174
Operating expenses and other losses (gains), net:     
Selling, general and administrative expenses203,071
 180,983
 175,364
Selling, general and administrative expenses209,381 178,084 170,536 
Restructuring charges1,855
 3,657
 6,246
Restructuring charges9,909 12,401 20,525 
Litigation and other losses (gains), net(1,196) (2,019) 1,111
Depreciation and amortization28,365
 34,575
 38,213
Depreciation and amortization27,359 25,489 29,643 
Goodwill impairment charges—
 —
 253,093
Goodwill impairment charges— — 59,816 
Total operating expenses and other losses (gains), net232,095
 217,196
 474,027
Total operating expensesTotal operating expenses1,059,201 874,119 899,866 
Operating income (loss)63,706
 52,096
 (207,456)Operating income (loss)99,760 52,839 (28,852)
Other income (expense), net:     Other income (expense), net:
Interest expense, net of interest income(15,648) (19,013) (18,613)Interest expense, net of interest income(11,883)(8,150)(9,292)
Other income (expense), net4,433
 (7,862) 3,565
Total other expense, net(11,215) (26,875) (15,048)
Other income, netOther income, net20,700 35,347 4,271 
Total other income (expense), netTotal other income (expense), net8,817 27,197 (5,021)
Income (loss) from continuing operations before taxes52,491
 25,221
 (222,504)Income (loss) from continuing operations before taxes108,577 80,036 (33,873)
Income tax expense (benefit)10,512
 11,277
 (51,999)Income tax expense (benefit)33,025 17,049 (10,155)
Net income (loss) from continuing operations41,979
 13,944
 (170,505)Net income (loss) from continuing operations$75,552 $62,987 $(23,718)
Income (loss) from discontinued operations, net of tax(236) (298) 388
Loss from discontinued operations, net of taxLoss from discontinued operations, net of tax— — (122)
Net income (loss)$41,743
 $13,646
 $(170,117)Net income (loss)$75,552 $62,987 $(23,840)
Net earnings (loss) per basic share:     
Earnings per share:Earnings per share:
Net income (loss) per basic share:Net income (loss) per basic share:
Net income (loss) from continuing operations$1.91
 $0.64
 $(7.95)Net income (loss) from continuing operations$3.73 $2.94 $(1.08)
Income (loss) from discontinued operations, net of tax(0.01) (0.01) 0.02
Loss from discontinued operations, net of taxLoss from discontinued operations, net of tax— — (0.01)
Net income (loss)$1.90
 $0.63
 $(7.93)Net income (loss)$3.73 $2.94 $(1.09)
Net earnings (loss) per diluted share:     Net earnings (loss) per diluted share:
Net income (loss) from continuing operations$1.87
 $0.63
 $(7.95)Net income (loss) from continuing operations$3.64 $2.89 $(1.08)
Income (loss) from discontinued operations, net of tax(0.02) (0.01) 0.02
Loss from discontinued operations, net of taxLoss from discontinued operations, net of tax— — (0.01)
Net income (loss)$1.85
 $0.62
 $(7.93)Net income (loss)$3.64 $2.89 $(1.09)
Weighted average shares used in calculating earnings per share:     Weighted average shares used in calculating earnings per share:
Basic21,993
 21,706
 21,439
Basic20,249 21,439 21,882 
Diluted22,507
 22,058
 21,439
Diluted20,746 21,809 21,882 
Comprehensive income (loss):     Comprehensive income (loss):
Net income (loss)$41,743
 $13,646
 $(170,117)Net income (loss)$75,552 $62,987 $(23,840)
Foreign currency translation adjustments, net of tax99
 (1,814) 1,602
Foreign currency translation adjustments, net of tax(1,890)(925)348 
Unrealized gain (loss) on investment, net of tax(702) 7,772
 4,724
Unrealized gain (loss) on investment, net of tax(6,146)1,169 1,323 
Unrealized gain (loss) on cash flow hedging instruments, net of tax(956) 167
 429
Unrealized gain (loss) on cash flow hedging instruments, net of tax9,315 3,535 (3,546)
Other comprehensive income (loss)(1,559) 6,125
 6,755
Other comprehensive income (loss)1,279 3,779 (1,875)
Comprehensive income (loss)$40,184
 $19,771
 $(163,362)Comprehensive income (loss)$76,831 $66,766 $(25,715)
The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)

Common StockTreasury StockAdditional
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income		Stockholders'
Equity
Common Stock Treasury Stock 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Stockholders'
Equity
 SharesAmountSharesAmount
Balance at December 31, 2019Balance at December 31, 201924,603,308 $247 (2,763,302)$(128,348)$460,781 $237,849 $14,936 $585,465 
Comprehensive lossComprehensive loss(23,840)(1,875)(25,715)
Issuance of common stock in connection with:Issuance of common stock in connection with:
Restricted stock awards, net of cancellationsRestricted stock awards, net of cancellations342,311 3 87,155 6,365 (6,368)— 
Exercise of stock optionsExercise of stock options40,400 — 1,003 1,003 
Share-based compensationShare-based compensation24,998 24,998 
Shares redeemed for employee tax withholdingsShares redeemed for employee tax withholdings(136,749)(7,903)(7,903)
Shares Amount Shares Amount 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Stockholders'
Equity
Balance at December 31, 201623,478,016
 $235
 (2,420,913) $(113,195) 
Share repurchasesShare repurchases(425,164)(4)(25,902)(25,906)
Balance at December 31, 2020Balance at December 31, 202024,560,855 $246 (2,812,896)$(129,886)$454,512 $214,009 $13,061 $551,942 
Comprehensive income          (170,117) 6,755
 (163,362)Comprehensive income62,987 3,779 66,766 
Issuance of common stock in connection with:               Issuance of common stock in connection with:
Restricted stock awards, net of cancellations399,248
 4
 (58,211) (3,953) 3,949
     —
Restricted stock awards, net of cancellations475,250 5 101,236 4,020 (4,025)— 
Business acquisition221,558
 2
     9,558
     9,560
Exercise of stock optionsExercise of stock options23,403 — 804 804 
Purchase of businessPurchase of business74,671 1 3,322 3,323 
Share-based compensation        14,419
     14,419
Share-based compensation23,971 23,971 
Shares redeemed for employee tax withholdings    (112,011) (4,846)       (4,846)Shares redeemed for employee tax withholdings(197,189)(10,103)(10,103)
Cumulative-effect adjustment from adoption of ASU 2016-09        435
 (435)   —
Cumulative-effect adjustment from adoption of ASU 2018-02          (488)   (488)
Balance at December 31, 201724,098,822
 $241
 (2,591,135) $(121,994) $434,256
 $180,443
 $10,370
 $503,316
Share repurchasesShare repurchases(1,265,261)(13)(64,790)(64,803)
Balance at December 31, 2021Balance at December 31, 202123,868,918 $239 (2,908,849)$(135,969)$413,794 $276,996 $16,840 $571,900 
Comprehensive income          13,646
 6,125
 19,771
Comprehensive income75,552 1,279 76,831 
Issuance of common stock in connection with:               Issuance of common stock in connection with:
Restricted stock awards, net of cancellations279,430
 3
 5,986
 387
 (390)     —
Restricted stock awards, net of cancellations363,891 4 109,548 6,208 (6,212)— 
Exercise of stock options40,000
 —
     937
     937
Exercise of stock options36,536 — 1,421 1,421 
Share-based compensation        17,770
     17,770
Share-based compensation30,991 30,991 
Shares redeemed for employee tax withholdings    (86,813) (3,187)       (3,187)Shares redeemed for employee tax withholdings(153,846)(7,795)(7,795)
Cumulative-effect adjustment from adoption of ASU 2014-09          2,017
   2,017
Balance at December 31, 201824,418,252
 $244
 (2,671,962) $(124,794) $452,573
 $196,106
 $16,495
 $540,624
Comprehensive income          41,743
 (1,559) 40,184
Issuance of common stock in connection with:               
Restricted stock awards, net of cancellations347,589
 4
 20,171
 1,828
 (1,832)     —
Exercise of stock options47,904
 1
     1,243
     1,244
Share-based compensation        22,854
     22,854
Shares redeemed for employee tax withholdings    (111,511) (5,382)       (5,382)
Other capital contributions        160
     160
Share repurchases(210,437) (2)     (14,217)     (14,219)Share repurchases(2,037,752)(20)(121,288)(121,308)
Balance at December 31, 201924,603,308
 $247
 (2,763,302) $(128,348) $460,781
 $237,849
 $14,936
 $585,465
Balance at December 31, 2022Balance at December 31, 202222,231,593 $223 (2,953,147)$(137,556)$318,706 $352,548 $18,119 $552,040 
The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year Ended December 31,
 202220212020
Cash flows from operating activities:
Net income (loss)$75,552 $62,987 $(23,840)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization27,359 25,978 30,222 
Non-cash lease expense6,369 6,967 7,763 
Lease-related impairment charges211 — 13,217 
Share-based compensation30,971 25,857 24,081 
Amortization of debt discount and issuance costs1,169 794 793 
Goodwill impairment charges— — 59,816 
Allowances for doubtful accounts141 13 1,050 
Deferred income taxes18,784 12,480 (9,859)
Gain on sale of property and equipment, excluding transaction costs(1,111)(343)(25)
(Gain) loss on sales of businesses, excluding transaction costs— (32,824)1,603 
Change in fair value of contingent consideration liabilities(359)173 — 
Change in fair value of preferred stock investment(26,964)— (1,667)
Other, net6 (78)— 
Changes in operating assets and liabilities, net of acquisitions and divestitures:
(Increase) decrease in receivables from clients, net(25,847)(39,845)33,051 
(Increase) decrease in unbilled services, net(51,359)(38,820)18,876 
(Increase) decrease in current income tax receivable / payable, net7,673 (2,723)(3,662)
(Increase) decrease in other assets2,532 (2,670)(11,972)
Increase (decrease) in accounts payable and accrued liabilities(13,466)10,394 (7,786)
Increase (decrease) in accrued payroll and related benefits32,770 (2,636)(1,169)
Increase (decrease) in deferred revenues969 (7,717)6,246 
Net cash provided by operating activities85,400 17,987 136,738 
Cash flows from investing activities:
Purchases of property and equipment(12,547)(10,871)(8,125)
Investments in life insurance policies(872)(1,245)(2,462)
Distributions from life insurance policies3,377 — — 
Purchases of businesses, net of cash acquired(3,448)(44,819)(8,701)
Purchases of investment securities— — (13,000)
Capitalization of internally developed software costs(11,752)(4,889)(8,272)
Proceeds from note receivable154 — — 
Proceeds from sale of property and equipment4,753 408 25 
Divestitures of business207 41,273 (1,499)
Net cash used in investing activities(20,128)(20,143)(42,034)
Cash flows from financing activities:
Proceeds from exercises of stock options1,421 804 1,003 
Shares redeemed for employee tax withholdings(7,795)(10,103)(7,903)
Share repurchases(120,393)(64,612)(27,141)
Proceeds from bank borrowings314,000 235,000 283,000 
Repayments of bank borrowings(256,780)(205,499)(288,574)
Payments for debt issuance costs(2,686)— — 
Deferred payments on business acquisitions(1,875)— — 
Net cash used in financing activities(74,108)(44,410)(39,615)
Effect of exchange rate changes on cash(111)170 484 
Net increase (decrease) in cash and cash equivalents(8,947)(46,396)55,573 
Cash and cash equivalents at beginning of the period20,781 67,177 11,604 
Cash and cash equivalents at end of the period$11,834 $20,781 $67,177 
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Property and equipment expenditures and capitalized software included in accounts payable, accrued expenses and accrued payroll and related benefits$3,784 $4,733 $1,178 
Contingent consideration related to purchases of businesses$1,185 $1,800 $1,770 
Common stock issued related to purchase of business$— $3,323 $— 
Share repurchases included in accounts payable$1,107 $191 $— 
Cash paid during the year for:
Interest$12,246 $7,976 $8,309 
Income taxes$13,485 $8,449 $4,721 
 Year Ended December 31,
 2019 2018 2017
Cash flows from operating activities:     
Net income (loss)$41,743
 $13,646
 $(170,117)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:     
Depreciation and amortization34,405
 39,311
 50,089
Non-cash lease expense8,397
 —
 —
Share-based compensation24,213
 18,818
 14,838
Amortization of debt discount and issuance costs8,264
 10,313
 10,203
Goodwill impairment charges—
 —
 253,093
Allowances for doubtful accounts and unbilled services250
 657
 3,217
Deferred income taxes8,795
 10,717
 (53,753)
Loss (gain) on sale of businesses—
 5,807
 (931)
Change in fair value of contingent consideration liabilities(1,506) 381
 1,111
Other, net16
 —
 —
Changes in operating assets and liabilities, net of acquisitions and divestiture:     
(Increase) decrease in receivables from clients(10,123) (10,509) 1,650
(Increase) decrease in unbilled services(10,269) (11,094) (4,332)
(Increase) decrease in current income tax receivable / payable, net4,442
 (2,607) 210
(Increase) decrease in other assets(144) (1,361) (366)
Increase (decrease) in accounts payable and accrued liabilities(6,884) (8,212) 3,732
Increase (decrease) in accrued payroll and related benefits30,339
 35,481
 (10,966)
Increase (decrease) in deferred revenues282
 310
 2,117
Net cash provided by operating activities132,220
 101,658
 99,795
Cash flows from investing activities:     
Purchases of property and equipment, net(13,240) (8,936) (24,402)
Investment in life insurance policies(4,703) (2,037) (1,826)
Distributions from life insurance policies—
 —
 2,889
Purchases of businesses, net of cash acquired(2,500) (215) (106,915)
Purchase of investment securities(5,000) —
 —
Capitalization of internally developed software(10,312) (6,069) (1,370)
Proceeds from note receivable—
 1,040
 1,177
Proceeds from sale of property and equipment753
 —
 —
Divestitures of businesses, net of cash sold—
 (2,345) 1,499
Net cash used in investing activities(35,002) (18,562) (128,948)
Cash flows from financing activities:     
Proceeds from exercises of stock options1,244
 937
 —
Shares redeemed for employee tax withholdings(5,382) (3,187) (4,846)
Share repurchases(12,985) —
 —
Proceeds from bank borrowings347,000
 204,300
 277,500
Repayments of bank borrowings(192,515) (259,801) (240,745)
Repayment of convertible notes(250,000) —
 —
Payments for debt issuance costs(1,524) (1,385) (408)
Payments for contingent consideration liabilities(4,674) (7,554) (2,680)
Net cash provided by (used in) financing activities(118,836) (66,690) 28,821
Effect of exchange rate changes on cash115
 (208) 214
Net increase (decrease) in cash and cash equivalents(21,503) 16,198
 (118)
Cash and cash equivalents at beginning of the period33,107
 16,909
 17,027
Cash and cash equivalents at end of the period$11,604
 $33,107
 $16,909
Supplemental disclosure of cash flow information:     
Non-cash investing and financing activities:     
Property and equipment expenditures and capitalized software included in accounts payable and accrued expenses$2,600
 $2,358
 $1,567
Promissory note assumed for purchase of property and equipment$—
 $—
 $5,113
Contingent consideration related to business acquisitions$—
 $212
 $15,489
Common stock issued related to business acquisition$—
 $—
 $9,560
Share repurchases included in accounts payable$1,234
 $—
 $—
Cash paid during the year for:     
Interest$7,971
 $8,887
 $9,068
Income taxes$1,429
 $3,349
 $5,399
The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)


1. Description of Business

Huron is a global consultancyprofessional services firm that collaboratespartners with clients to drive strategicdevelop growth ignite innovationstrategies, optimize operations and navigate constant change. Through a combinationaccelerate digital transformation using an enterprise portfolio of strategy, expertisetechnology, data and creativity, we helpanalytics solutions to empower clients accelerate operational, digital and cultural transformation, enabling the change they need to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. The new operating model strengthens Huron’s go-to-market strategy, drives efficiencies that support margin expansion, and positions the company to accelerate growth.
To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment.We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. These changes improve visibility into the core drivers of our business. While our consolidated results have not been impacted, our historical segment information has been recast for consistent presentation.
See Note 19 “Segment Information” for a discussion of our three segments.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements reflect the financial position at December 31, 20192022 and 2018,2021, and the results of operations and cash flows for the years ended December 31, 2019, 2018,2022, 2021, and 2017.2020.
The consolidated financial statements include the accounts of Huron Consulting Group Inc. and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation.

On January 1, 2019,In order to better align with industry standards, in the first quarter of 2022, we adopted Accounting Standard Update ("ASU") 2016-02, Leases. For additional information onrevised the adoptionpresentation of ASU 2016-02, referour consolidated statement of operations and other comprehensive income (loss) to our leases policypresent depreciation and new accounting pronouncements below.

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contractsamortization expense in the aggregate with Customers, a new Topic, ASC 606, which superseded ASC 605, Revenue Recognition.amortization of intangible assets and software development costs that were previously presented separately within total direct costs and reimbursable expenses. We also aggregated immaterial line items within selling, general and administrative expenses. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customerschange in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted ASC 606 on a modified retrospective basis to all open contracts, as modified, as of that date. Adoption of the new standard resulted in changes to our accounting policy for revenue recognition, most notably for performance-based billing arrangements, and sales commissions. Adopting ASC 606 on a modified retrospective basis hadpresentation has no impacteffect on our consolidated financialresults, and our historical consolidated statements in the prior periods presented. Upon adoption, we recorded a $2.0 million cumulative-effect adjustment to record a net increase to retained earningsof operations and other comprehensive income (loss) were revised for the portion of performance-based billing arrangements that have been earned as of the adoption date but for which we had not recognized as revenue under previous revenue recognition guidance, the capitalization of sales commissions paid on open contracts as of the adoption date, and the related tax effects. Refer to our revenue recognition and capitalized sales commissions policies below for additional information.consistent presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Actual results may differ from these estimates and assumptions.
Revenue Recognition
We generate substantially all of our revenues from providing professional services to our clients. We also generate revenues from software licenses; software support and maintenance and subscriptions to our cloud-based analytic tools and solutions; speaking engagements; conferences; and publications. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, we allocate the total transaction price to each performance obligation based on its relative standalone selling price, which is determined based on our overall pricing objectives, taking into consideration market conditions and other factors.
Revenue is recognized when control of the goods and services provided are transferred to our customers and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when we satisfy the performance obligations.
We typically satisfy our performance obligations for professional services over time as the related services are provided. The performance obligations related to software support and maintenance and subscriptions to our cloud-based analytic tools and solutions are typically satisfied evenly over the course of the service period. Other performance obligations, such as certain software licenses, speaking engagements, conferences, and publications, are satisfied at a point in time.


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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

We generate our revenues under 4four types of billing arrangements: fixed-fee (including software license revenue); time-and-expense; performance-based; and software support, maintenance and subscriptions.
•Fixed-fee (including software license revenue): In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. We generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Contracts within our Culture and Organizational Excellence solution include fixed-fee partner contracts with multiple performance obligations, which primarily consist of coaching services, as well as speaking engagements, conferences, publications and software products (“Partner Contracts”). Revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract. All other revenues under Partner Contracts, including speaking engagements, conferences and publications, are recognized at the time the goods or services are provided. Estimates of total engagement revenues and cost of services are monitored regularly during the term of the engagement. If our estimates indicate a potential loss, such loss is recognized in the period in which the loss first becomes probable and reasonably estimable.
We also generate revenues from software licenses for our revenue cycle management software and research administration and compliance software. Licenses for our revenue cycle management software are sold only as a component of our consulting projects, and the services we provide are essential to the functionality of the software. Therefore, revenues from these software licenses are recognized over the term of the related consulting services contract. License revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered.
Time-and-expense•Time-and-expense: Under time-and-expense billing arrangements, we require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and publications purchased by our clients outside of Partner Contracts within our Culture and Organizational Excellence solution.solution and the portion of our Healthcare Managed Services contracts that are billed under time-and-expense arrangements. We recognize revenues under time-and-expense arrangements as the related services or publications are provided, using the right to invoice practical expedient which allows us to recognize revenue in the amount that we have a right to invoice based on the number of hours worked and the agreed upon hourly rates or the value of the speaking engagements, conferences or publications purchased by our clients.
•Performance-based: In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur. We recognize revenue under performance-based billing arrangements using the following steps: 1) estimate variable consideration using a probability-weighted assessment of the fees to be earned, 2) apply a constraint to the estimated variable consideration to limit the amount that could be reversed when the uncertainty is resolved (the “constraint”), and 3) recognize revenue of estimated variable consideration, net of the constraint, based on work completed to-date versus our estimates of the total services to be provided under the engagement.
•Software support, maintenance and subscriptions: Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance. We also generate subscription revenue from our cloud-based analytic tools and solutions. Software support, maintenance and subscription revenues are recognized ratably over the support or subscription period. These fees are generally billed in advance and included in deferred revenues until recognized.
Provisions are recorded for the estimated realization adjustments on all engagements, including engagements for which fees are subject to review by the bankruptcy courts.
Expense reimbursementsReimbursable expenses that are billablebilled to clients, primarily relating to travel and out-of-pocket expenses incurred in connection with client engagements, are included in total revenues and reimbursable expenses. Under fixed-fee billing arrangements, we estimate the total amount of reimbursable expenses to be incurred over the course of the engagement and recognize the estimated amount as revenue using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Under time-and-expense billing arrangements we recognize reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Subcontractors that are billed to clients at cost are also included in reimbursable expenses. When billings do not specifically identify reimbursable expenses, we allocate the portion of the billings equivalent to these expenses to reimbursable expenses.
The payment terms and conditions in our customer contracts vary. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the consolidated balance sheets. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled services. Revenues recognized, but for which we are not yet entitled to bill because certain events, such as the completion of the measurement period or client approval, must occur, are recorded as contract assets

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

and included within unbilled services. Client prepayments and retainers are classified as deferred revenues and recognized over future periods as earned in accordance with the applicable engagement agreement.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
Capitalized Sales Commissions
Sales commissions earned by our sales professionals are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions with an expected amortization period greater than one year are deferred and amortized on a straight-line basis over the period of the associated contract. We elected to apply the practical expedient to expense sales commissions as incurred when the expected amortization period is one year or less. Amortization expense is recorded to direct costs. During the years ended December 31, 20192022, 2021, and 2018,2020, we amortized $0.3 million, $0.4 million, and $0.2$0.4 million, respectively, of capitalized sales commissions. Unamortized sales commissions were $0.8$0.4 million and $0.4$0.6 million as of December 31, 20192022 and 2018,2021, respectively.
Allowances for Doubtful Accounts and Unbilled Services
We maintain allowances for doubtful accounts and for services performed but not yet billed based on several factors, including the estimated cash realization from amounts due from clients, an assessment of a client’s ability to make required payments, and the historical percentages of fee adjustments and write-offs by age of receivables and unbilled services. The allowances are assessed by management on a regular basis. These estimates may differ from actual results. If the financial condition of a client deteriorates in the future, impacting the client’s ability to make payments, an increase to our allowance might be required or our allowance may not be sufficient to cover actual write-offs.
We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments.revenue. To the extent the provision relateswe write-off accounts receivable due to a client’sclient's inability to make required payments on accounts receivables, we recordpay, the provision tocharge is recognized as a component of selling, general and administrative expenses.
Direct Costs
Direct costs primarily consist of payroll costs for our revenue-generating professionals which includes salaries, performance bonuses, share-based compensation, signing and Reimbursable Expenses
retention bonuses, payroll taxes and benefits. Direct costs also include fees paid to independent contractors that we retain to supplement our revenue-generating professionals, typically on an as-needed basis for specific client engagements, as well as technology costs, product and event costs, and commissions. Direct costs exclude amortization of intangible assets and software development costs and reimbursable expenses, consist primarilyboth of revenue-generating employee compensation and their related benefits and share-based compensation costs; as well as commissions, the costwhich are separately presented in our consolidated statements of outside consultants or subcontractors assigned to revenue-generating activities, technology costs, other third-party costs directly attributable to our revenue-generating activities, and direct expenses to be reimbursed by clients.operations. Direct costs and reimbursable expenses incurred on engagements are expensed in the period incurred.
Cash and Cash Equivalents
We consider all highly liquid investments, including overnight investments and commercial paper, with original maturities of three months or less to be cash equivalents.
Concentrations of Credit Risk
To the extent receivables from clients become delinquent, collection activities commence. No single client balance is considered large enough to pose a material credit risk. The allowances for doubtful accounts and unbilled services are based upon the expected ability to collect accounts receivable and bill and collect unbilled services. Management does not anticipate incurring losses on accounts receivable in excess of established allowances. See Note 19 “Segment Information” for concentration of accounts receivable and unbilled services.
We hold our cash in accounts at multiple third-party financial institutions. These deposits, at times, may exceed federally insured limits. We review the credit ratings of these financial institutions, regularly monitor the cash balances in these accounts, and adjust the balances as appropriate. However, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets.
Long-term Investments
Our long-term investments consist of our convertible debt investment in Shorelight Holdings, LLC ("Shorelight"(“Shorelight”) and preferred stock investment in Medically Home Group, Inc. ("(“Medically Home"Home”).
We classified the convertible debt investment in Shorelight as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. The investment is carried at fair value with unrealized holding gains and losses reported in other comprehensive income. If the investment is in an unrealized loss position we assess whether the investment is other-than-temporarily impaired. We consider impairments to be other-than-temporary if they are relateddue to significant credit deterioration or if it is likelyof the investee, we will sellrecognize an allowance to decrease the security beforecarrying value of the recoveryinvestment to the fair value, which may be reversed in the event that the credit of its cost basis. We have not identified any other-than-temporary impairments for our convertible debt investment.an issuer improves. In the event there are realized gains and losses or declines in value judged to be other-than-temporary,credit allowances recognized, we will record the amount in earnings.

 We have not recognized any credit allowance on our convertible debt investment or realized gains or losses as of December 31, 2022. See Note 13 “Fair Value of Financial Instruments” for additional information on our convertible debt investment.
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We classified the preferred stock investment in Medically Home as an equity security without a readily determinable value at the time of purchase and reevaluate such classification as of each balance sheet date. We elected to apply the measurement alternative at the time of purchase and will continue to value this equity security without a readily determinable fair value.do so until the investment does not qualify to be so measured. Under the measurement alternative, the investment is recordedcarried at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for thean identical or similar investment in Medically Home. Any unrealized holding gains and losses resulting from observable price changes are recorded in our consolidated statement of operations. Following our purchase, there has been nowe have not identified any impairment nor any observable price changes toof our investment.
See Note 13 “Fair Value of Financial Instruments” for furtheradditional information on our long-term investments.preferred stock investment and the unrealized gains recognized since our initial investment.
Fair Value of Financial Instruments
See Note 13 “Fair Value of Financial Instruments” for the accounting policies used to measure the fair value of our financial assets and liabilities that are measured at fair value on a recurring basis.
Property and Equipment
Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Software, computers, and related equipment are depreciated over an estimated useful life of two to four years. Furniture and fixtures are depreciated over five years. Aircraft are depreciated over ten years. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the initial term of the lease.
Leases
We determine if an arrangement contains a lease and the classification of such lease at inception. As of December 31, 2019,2022 and 2021, all of our material leases are classified as operating leases; we have not entered into any material finance leases. For all operating leases with an initial term greater than 12 months, we recognize an operating lease right-of-use ("ROU"(“ROU”) asset and operating lease liability. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date and provided by the administrative agent for our senior secured credit facility in determining the present value of lease payments. Operating lease ROU assets exclude lease incentives. We elected the practical expedient to combine lease and nonlease components. Certain lease agreements contain variable lease payments that do not depend on an index or rate. These variable lease payments are not included in the calculation of the operating lease ROU asset and operating lease liability; instead, they are expensed as incurred. Our leases may contain options to extend or terminate the lease, and we include these terms in our calculation of the operating lease ROU asset and operating lease liability when it is reasonably certain that we will exercise the option.
Operating lease expense is recognized on a straight-line basis over the lease term and recorded within selling, general and administrative expenses on our consolidated statement of operations. In accordance with our accounting policy for impairment of long-lived assets, operating lease ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group to which the operating lease ROU asset is assigned may not be recoverable. We evaluate the recoverability of the asset group based on forecasted undiscounted cash flows. See Note 5 "Leases"“Leases” for additional information on our leases, including the lease impairment charges recorded in 2019.2022 and 2020.
Software Development Costs
We incur internal and external software development costs related to our cloud computing applications and software for internal use. We capitalize these software development costs incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the project is substantially complete and ready for its intended use, these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life.
Development costs related to software products that will be sold, leased, or otherwise marketed are expensed until technological feasibility has been established. Thereafter, and until the software is available for general release to customers, these software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. These capitalized development costs are

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amortized in proportion to current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product. We did not capitalize any development costs for this type of software during 20192022 or 2018.2021.
We classify capitalized software development costs, which primarily relate to cloud computing applications and software for internal use, as other non-current assets on our consolidated balance sheet. As of December 31, 2019,2022, gross capitalized software development costs and related accumulated amortization was $21.5$47.7 million and $5.9$21.5 million, respectively. As of December 31, 2018,2021, gross capitalized software development costs and related accumulated amortization was $10.2$33.6 million and $2.9$15.6 million, respectively. During the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, we amortized $3.0$5.9 million, $1.4$5.2 million, and $0.8$4.7 million, respectively, of capitalized software development costs.
Implementation Costs Incurred in a Cloud Computing Arrangement
We incur costs to implement cloud computing arrangements that are service contracts. We capitalize certain costs associated with the implementation of the cloud computing arrangements, including employee payroll and related benefits and third party consulting costs, incurred during the application development stage of a project. These costs are amortized on a straight-line basis over the term of the hosting service contracts, including renewal periods we are reasonably certain to exercise, and recognized as a component of selling, general and administrative expenses on our consolidated statement of operations. As of December 31, 2022, gross capitalized implementation costs incurred in a cloud computing arrangement and related accumulated amortization was $6.5 million and $1.5 million, respectively. As of December 31, 2021, gross capitalized implementation costs incurred in a cloud computing arrangement and related accumulated amortization was $6.5 million and $0.9 million, respectively. During the years ended December 31, 2022 and 2021, we recognized amortization of our capitalized implementation costs of $1.2 million and $0.9 million, respectively. We did not recognize any amortization of capitalized implementation costs in 2020. Of the $1.2 million amortization for capitalized implementation costs in 2022, $0.3 million was recognized as a restructuring charge as it related to accelerated amortization of capitalized software implementation costs for a cloud-computing arrangement that is no longer in use. Our capitalized implementation costs primarily relate to the implementation of a new enterprise resource planning (“ERP”) system. In January 2021, we successfully went live with the new ERP system, and we continue to progress with additional functionality and integrations as scheduled. These capitalized costs are included as a component of prepaid expenses and other current assets and other non-current assets on our consolidated balance sheet.
Intangible Assets Other Than Goodwill
Identifiable intangible assets are amortized over their expected useful lives using a method that reflects the economic benefit expected to be derived from the assets or on a straight-line basis. We evaluate the recoverability of intangible assets periodically by considering events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.
Impairment of Long-Lived Assets
Long-lived assets, including property and equipment, right-of-use assets, and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a significant decline in forecasted operating results over an extended period of time. We evaluate the recoverability of long-lived assets based on forecasted undiscounted cash flows. See Note 5 "Leases"“Leases” and Note 11 “Restructuring Charges” for information on our operating lease right-of-use asset impairment charges recorded in 2019.2022 and 2020 and fixed asset impairment charges recorded in 2020. No material impairment charges for other long-lived assets were recorded in 2019, 2018,2022, 2021, or 2017.2020.
Goodwill
For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. We perform our annual goodwill impairment test as of November 30 and monitor for interim triggering events on an ongoing basis. A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. WeAs of December 31, 2022, we have 6three reporting units: Healthcare, Education, Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences. The Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life SciencesCommercial.
In 2022, we performed two goodwill impairment tests: an interim impairment test for each of our reporting units make up our Business Advisoryas of January 1, 2022 in connection with the operating segment. 
Pursuant to our policy, we performedmodel modification and the annual goodwill impairment test for each of our reporting units as of November 30, 2019 and determined that no30. We did not identify any impairments during our interim or annual impairment of goodwill existed as of that date.tests performed during 2022. Further, we evaluated whether any events have occurred, or any circumstances have changed since November 30, 20192022 that would indicate goodwill may have become impaired since
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our annual impairment test. Based on our evaluation as of December 31, 2019,2022, we determined that no indications of impairment have arisen since our annual goodwill impairment test.
In 2021, we performed the annual goodwill impairment test as of November 30, 2021, pursuant to our policy, and determined that no impairment of goodwill existed as of that date.
In 2020, we performed two goodwill impairment tests: an interim impairment test on our Strategy and Innovation and Life Sciences reporting units in the first quarter of 2020 and the annual impairment test on all reporting units with a goodwill balance in the fourth quarter of 2020. As a result of the interim impairment test performed in the first quarter of 2020, we recorded total non-cash pretax goodwill impairment charges of $59.8 million. We did not identify any additional impairments during our annual impairment test performed in the fourth quarter of 2020.
See Note 4 “Goodwill and Intangible Assets” for additional information on our interim and annual goodwill impairment tests, and the non-cash goodwill impairment charges recorded in 2020.
Business Combinations
We use the acquisition method of accounting for business combinations. Each acquired company’s operating results are included in our consolidated financial statements starting on the date of acquisition. The purchase price is equivalent to the fair value of consideration transferred. TangibleIn 2021, we adopted Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers retrospectively to all acquisitions in 2021. Under ASU 2021-08, contract assets and contract liabilities acquired are recorded at their carrying value under Topic 606: Revenue from Contracts with Customers. Prior to adoption of ASU 2021-08, contract assets and contract liabilities were recognized at their estimated fair values as of the acquisition date. All other tangible assets and identifiable intangible assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. Goodwill is recognized for the excess of purchase price over the net fair value of tangible and intangible assets acquired and liabilities assumed. Contingent consideration, which is primarily based on the business achieving certain performance targets, is recognized at its fair value on the acquisition date, and changes in fair value are recognized in earnings until settled. Refer to Note 3 “Acquisitions and Divestitures” for additional information on our business acquisitions and refer to Note 13 “Fair Value of Financial Instruments” for furtheradditional information regarding our contingent acquisition liability balances.

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Income Taxes
Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. We have elected to recognize the tax expense related to Global Intangible Low-Taxed Income ("GILTI") as a current period expense in the period the tax iswhen incurred. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets will not likely be recovered from future taxable income, a valuation allowance is established against such deferred tax assets. Refer to Note 17 "Income Taxes" for further information regarding incomes taxes.
Share-Based Compensation
Share-based compensation cost is measured based on the grant date fair value of the respective awards. We generally recognize share-based compensation ratably using the straight-line attribution method; however, for those awards with performance criteria and graded vesting features, we use the graded vesting attribution method. It is our policy to account for forfeitures as they occur. Refer to Note 16 "Equity Incentive Plan" for further information regarding share-based compensation.
Sponsorship and Advertising Costs
Sponsorship and advertising costs are expensed as incurred. Such expenses for the years ended December 31, 2019, 2018,2022, 2021, and 20172020 totaled $8.4$6.3 million, $7.9$4.3 million, and $6.6$4.1 million, respectively, and are a component of selling, general and administrative expenses on our consolidated statement of operations.
Convertible Senior Notes
In September 2014, we issued $250 million principal amount of 1.25% convertible senior notes due 2019 (the “Convertible Notes”) in a private offering. The Convertible Notes matured on October 1, 2019, and the outstanding principal and accrued interest were paid in full at that time. At issuance, we separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying value of the equity component representing the conversion option, which was recognized as a debt discount, was determined by deducting the fair value of the liability component from the proceeds of the Convertible Notes. The debt discount was amortized to interest expense using the effective interest method over the term of the Convertible Notes. The equity component was not remeasured as it continued to meet the conditions for equity classification. Refer to Note 7 “Financing Arrangements” for further information regarding the Convertible Notes.
Debt Issuance Costs
We amortize the costs we incur to obtain debt financing over the contractual life of the related debt using the effective interest method for non-revolving debt and the straight-line method for our senior secured revolving debt.credit facility. The amortization expense is included in interest expense, net of interest income in our statement of operations. Unamortized debt issuance costs attributable to our revolving credit facility are included as a component of other non-current assets. Unamortized debt issuance costs attributable to our Convertible Notes were recorded as a deduction from the carrying amount
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(Tabular amounts in thousands, except per share amounts)
Foreign Currency
Assets and liabilities of foreign subsidiaries whose functional currency is not the United States Dollar (USD) are translated into the USD using the exchange rates in effect at period end. Revenue and expense items are translated using the average exchange rates for the period. Foreign currency translation adjustments are included in accumulated other comprehensive income, which is a component of stockholders’ equity.
Foreign currency transaction gains and losses are included in other income, net on the consolidated statement of operations. We recognized $0.2$0.7 million of foreign currency transaction gains in 2022, $0.4 million of foreign currency transaction losses in 2019, $0.5 million of foreign currency transaction losses in 2018,2021, and $0.4less than $0.1 million of foreign currency transaction gains in 2017.2020.
Segment Reporting
Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. OurAs of December 31, 2022, our chief operating decision maker manages the business under 3three operating segments, which are our reportable segments: Healthcare, Business Advisory,Education, and Education.Commercial.

New Accounting Pronouncements
Recently Adopted
In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform (Topic 848): Scope. Together, these ASUs provide optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting under GAAP.
On November 15, 2022, we entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement amends and restates, in its entirety, the Second Amended and Restated Credit Agreement, including amending the base interest rate from LIBOR to Term SOFR. Consequently, we updated the reference rate within our existing interest rate swap agreements from one month LIBOR to one month Term SOFR. As a result, in the fourth quarter of 2022, we adopted Accounting Standard Codification ("ASC") 848, Reference Rate Reform, which had no impact on our consolidated financial statements. Refer to Note 7 "Financing Arrangements" and Note 12 "Derivative Instruments and Hedging Activity" for further discussion of the Amended Credit Agreement and our interest rate swap agreements.
3. Acquisitions and Divestitures
Acquisitions
2022
AIMDATA, LLC
On January 18, 2022, we completed the acquisition of AIMDATA, LLC ("AIMDATA"), an advisory and implementation consulting services firm focused on strategy, technology and business transformation. The results of operations of AIMDATA are included within our consolidated financial statements as of the acquisition date and allocated among our three operating industries, which are our reportable segments, based on the engagements delivered by the business.
Customer Evolution, LLC
Effective December 31, 2022, we completed the acquisition of Customer Evolution, LLC ("Customer Evolution"), a healthcare advisory and technology implementation consulting services firm. The results of operations of Customer Evolution will be included in our consolidated financial statements and results of operations of our Healthcare segment beginning January 1, 2023.
The acquisitions of AIMDATA and Customer Evolution are not significant to our consolidated financial statements individually or in the aggregate as of and for the year ended December 31, 2022.
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2021
New Accounting PronouncementsUnico Solution, Inc.
Recently Adopted
In March 2016,On February 1, 2021, we completed the Financial Accounting Standards Board ("FASB"acquisition of Unico Solution, Inc. (“Unico Solutions”) issued ASU 2016-02, Leases, as a new Topic, ASC 842, which superseded ASC Topic 840, Leases,data strategy and sets forthtechnology consulting firm focused on helping clients enhance the principles for the recognition, measurement, presentation,use of their data to speed business transformation and disclosureaccelerate cloud adoption. The acquisition expands our cloud-based technology offerings within our Digital capability. The results of leases for lessees and lessors. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record on the balance sheet a right-of-use asset and a lease liability, equal to the present valueoperations of the remaining lease payments, for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized using an effective interest rate method or on a straight-line basis over the term of the lease. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method that allows entities to initially apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date. We adopted ASC 842 effective January 1, 2019 on a modified retrospective basis for existing leases using the transition method allowed by ASU 2018-11, which had no impact onUnico Solutions are included in our consolidated financial statements infrom the prior periods presented.date of acquisition. The new lease standard had a material impactresults of operations were initially recognized within our legacy Business Advisory segment and subsequently allocated among our three operating industries, which are our reportable segments, based on our consolidated balance sheet upon adoption but did not impact our consolidated statement of operations. The most significant impact to our consolidated balance sheet is the recognition of ROU assets and lease liabilities for operating leases. The impactengagements delivered by the business.
Bad Rabbit, Inc.
On October 1, 2021, we completed the acquisition of the new lease standard on our consolidated balance sheet upon adoption follows:
 
As of
December 31, 2018
 
ASC 842
Adjustment
 
As of
January 1, 2019
Assets     
Operating lease right-of-use assets$—
 $56,463
 $56,463
      
Liabilities     
Accrued expenses and other current liabilities$17,207
 $(2,557) $14,650
Current maturities of operating lease liabilities$—
 $10,537
 $10,537
Deferred compensation and other liabilities$20,875
 $(536) $20,339
Deferred lease incentives$13,693
 $(13,693) $—
Operating lease liabilities, net of current portion$—
 $62,712
 $62,712

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurredresearch administration software services team of Bad Rabbit, Inc. (“Bad Rabbit”). The results of operations of Bad Rabbit are included in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs are amortized on a straight-line basis generally over the term of the service contract with the amortization recognized in the same financial statement line item as the fees related to the service contract. ASU 2018-15 is effective beginning January 1, 2020, with early adoption permitted. We adopted this ASU in the third quarter of 2019 on a prospective basis. In 2019, we capitalized an immaterial amount of implementation costs for cloud computing arrangements that are service contracts. The future impact of adoption of this ASU on our consolidated financial statements will depend on the magnitude of implementation costs we may incur to implement cloud computing arrangements that are service contracts.
Not Yet Adopted
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies certain disclosure requirements related to fair value measurements. ASU 2018-13 will be effective for us beginning January 1, 2020. We do not expect this guidance to have an impact on the amounts reported on our consolidated financial statements and results of operations of our Education segment from the date of acquisition.
Whiteboard Communications Ltd.
On December 1, 2021, we will updatecompleted the acquisition of Whiteboard Communications Ltd. (“Whiteboard”), a student enrollment advisory firm that helps colleges and universities with recruitment initiatives and financial aid strategies. The results of operations of Whiteboard are included in our disclosures withinconsolidated financial statements and results of operations of our Education segment from the notesdate of acquisition.
Perception Health, Inc.
On December 31, 2021, we completed the acquisition of Perception Health, Inc. (“Perception Health”), a healthcare predictive analytics company focused on bringing data sources together for improved clinical and business decision-making. The results of operations of Perception Health are included in our consolidated financial statements and results of operations of our Healthcare segment beginning January, 1, 2022.
The acquisitions of Unico Solutions, Bad Rabbit, Whiteboard and Perception Health are not significant to our consolidated financial statements as required by ASU 2018-13.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740, Income Taxes, related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies other aspects of the accounting for franchise taxes and enacted changes in tax lawsindividually or tax rates and clarifies the accounting for transactions that result in a step-up in the tax basisaggregate as of goodwill. ASU 2019-12 will be effectiveand for us beginning Januarythe year ended December 31, 2021. The finalized measurement of assets acquired and liabilities assumed in the Whiteboard and Perception Health acquisitions were completed in the first quarter of 2022.
2020
B3i Analytics, LLC
On August 1, 2021, with early adoption permitted. We2020, we completed the acquisition of B3i Analytics, LLC (“B3i Analytics”), a software firm that provides a software as a solution (“SaaS”) application to leverage internal and external data to help higher education institutions forecast research revenue. The results of operations of B3i Analytics are currently evaluating the potential impact this guidance will have onincluded in our consolidated financial statements.statements and results of operations of our Education segment from the date of acquisition.

ForceIQ, Inc.
On November 1, 2020, we completed the acquisition of ForceIQ, Inc. (“ForceIQ”), a Salesforce Industries partner focused on helping clients drive digital transformation and innovation at scale powered by the cloud. The acquisition expands our cloud-based technology offerings within our Digital capability. The results of operations of ForceIQ are included in our consolidated financial statements from the date of acquisition. The results of operations were initially recognized within our legacy Business Advisory segment and subsequently allocated among our three operating industries, which are our reportable segments, based on the engagements delivered by the business.
The acquisitions of B3i Analytics and ForceIQ are not significant to our consolidated financial statements individually or in the aggregate as of and for the year ended December 31, 2020.
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Divestitures
3. Acquisitions2021
During the twelve months ended December 31, 2019 and 2018,Life Sciences
On November 1, 2021, we completed no acquisitions that were significant tothe divestiture of our consolidated financial statements individually or in the aggregate.
2017
Pope Woodhead and Associates Limited
On January 9, 2017, we completedLife Sciences business, a reporting unit within our acquisition of Pope Woodhead and Associates Limited ("Pope Woodhead"), a U.K.-based consulting firm providing market access capabilities to assist clients in developing value propositions for innovative medicines and technologies. The acquisition expands our life sciences strategy expertise and strengthens our ability to lead clients through complex payer and regulatory environments. Pope Woodhead's results of operations have been included in our consolidated financial statements and the results of operations of ourlegacy Business Advisory segment fromto a third-party. In connection with the date of acquisition.
ADI Strategies, Inc.
On April 1, 2017,sale, we completed our acquisition of the international assets of ADI Strategies, Inc. ("ADI Strategies") in Dubai and India. We acquired the U.S. assets of ADI Strategies in the second quarter of 2016. ADI Strategiesrecorded a $31.5 million pre-tax gain which is a leading enterprise performance management, risk management and business intelligence firm. The international results of operations of ADI Strategies have been included in other income, net on our consolidated financial statements and resultsstatement of operations of the Business Advisory segment from the date of acquisition. During the second quarter of 2018, we sold our Middle East practice, which primarily consisted of the international assets of the ADI Strategies acquisition, to a former employee whooperations. The Life Sciences business was the practice leader of that business at the time.
The acquisitions of ADI Strategies and Pope Woodhead are not significant to our consolidated financial statements individually or inand did not qualify as a discontinued operation for reporting under GAAP. For the aggregate as of and for the twelveten months ended October 31, 2021, this business generated $16.7 million of revenues.
2020
U.K. Life Sciences Drug Safety Practice
On December 31, 2017.
Innosight Holdings, LLC
On March 1, 2017,30, 2020, we acquired 100% of the membership interests of Innosight Holdings, LLC ("Innosight"). Innosight is a growth strategy firm focused on helping companies navigate disruptive change and manage strategic transformation. Together with Innosight, we usesold our strategic, operational, and technology capabilities to help clients across multiple industries develop pioneering solutions to address disruption and achieve sustained growth.
The acquisition date fair value of the consideration transferred for InnosightU.K. life sciences drug safety business that was $113.6 million, which consisted of the following:
Fair value of consideration transferred March 1, 2017
Cash$90,725
Common stock9,560
Contingent consideration liability12,050
Net working capital adjustment1,272
Total consideration transferred$113,607

We funded the cash component of the purchase price with cash on hand and borrowings of $89.0 million under our senior secured credit facility. We issued 221,558 shares of our common stock as part of the consideration transferred, with an acquisition date fair value of $9.6 million based on our common stock's closing price of $43.15 on the date of acquisition. The contingent consideration liability of $12.1 million represents the acquisition date fair value of the contingent consideration arrangement, pursuantlegacy Life Sciences reporting unit to which we may be required to pay additional consideration to the sellers if specific financial performance targets are met over a four-year term. The maximum amount of contingent consideration that may be paid is $35.0 million. See Note 13 "Fair Value of Financial Instruments" for additional information on the valuation of contingent consideration liabilities.
The acquisition was accounted for using the acquisition method of accounting. Tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the acquisition date.

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The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the acquisition date.
 March 1, 2017
Assets acquired: 
Accounts receivable$7,752
Unbilled services1,881
Prepaid expenses and other current assets468
Property and equipment419
Intangible assets18,015
Liabilities assumed: 
Accounts payable531
Accrued expenses and other current liabilities894
Accrued payroll and related benefits883
Deferred revenues30
Total identifiable net assets26,197
Goodwill87,410
Total purchase price$113,607

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the acquisition date.
 Fair Value 
Useful Life in
Years
Customer relationships$9,500
 6
Trade name6,000
 6
Customer contracts1,000
 1
Non-compete agreements1,300
 5
Favorable lease contract215
 1
Total intangible assets subject to amortization$18,015
  

The weighted average amortization period for the identifiable intangible assets shown above is 5.6 years. Customer relationships and customer contracts represent the fair values of the underlying relationships and agreements with Innosight customers. The trade name represents the fair value of the brand and name recognition associated with the marketing of Innosight's service offerings. Non-compete agreements represent the value derived from preventing certain Innosight executives from entering into or starting a similar, competing business. The favorable lease contract represents the difference between the fair value and minimum lease obligations under the current outstanding lease. Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed, and largely reflects the expanded market opportunities expected from combining the service offerings of Huron and Innosight, as well as the assembled workforce of Innosight. Goodwill recognized in conjunction with the acquisition of Innosight was recorded in the Business Advisory segment. Goodwill of $87.4 million is expected to be deductible for income tax purposes.
Innosight’s results of operations have been included in our consolidated statements of operations and results of operations of our Business Advisory segment from the date of acquisition. For the year ended December 31, 2017, revenues from Innosight were $34.3 millionand operating loss was $0.9 million, which included $3.4 millionof amortization expense for intangible assets acquired.former employees. In connection with the acquisitionsale, we recorded a $1.5 million loss which is included in other income, net on our consolidated statement of Innosight, we incurred $1.7operations. The U.K. life sciences drug safety practice was not significant to our consolidated financial statements and did not meet the criteria for reporting separately as discontinued operations. In 2020, this business generated $2.3 million of transaction and acquisition-related expenses in 2017. These costs are recorded in selling, general and administrative expenses.revenues.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

The following unaudited supplemental pro forma information summarizes the combined results of operations of Huron and Innosight as though the companies were combined on January 1, 2016.
 Year Ended
December 31, 2017
Revenues$741,695
Net income (loss) from continuing operations$(167,346)
Net income (loss) from continuing operations per share - basic$(7.79)
Net income (loss) from continuing operations per share - diluted$(7.79)

The historical financial information has been adjusted to give effect to pro forma adjustments consisting of intangible asset amortization expense, acquisition-related costs, interest expense, and the related income tax effects. The unaudited pro forma information above includes adjustments to include additional expense of $0.6 million for the year ended December 31, 2017. Additionally, the historical financial information has been adjusted to give effect to the shares issued as consideration. All of these adjustments are based upon currently available information and certain assumptions. Therefore, the pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2016. The historical results included in the pro forma consolidated results do not purport to project future results of operations of the combined companies nor do they reflect the expected realization of any cost savings or revenue synergies associated with the acquisition.
4. Goodwill and Intangible Assets
The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 20192022 and 2018. 2021. 
HealthcareEducation
Commercial(1)
Total
Balance as of December 31, 2020:
Goodwill$636,810 $104,384 $308,935 $1,050,129 
Accumulated impairment losses(208,081)— (247,811)(455,892)
Goodwill, net as of December 31, 2020$428,729 $104,384 $61,124 $594,237 
Goodwill recorded in connection with a business combination (2)
6,141 17,186 3,315 26,642 
Balance as of December 31, 2021:
Goodwill642,951 121,570 312,250 1,076,771 
Accumulated impairment losses(208,081)— (247,811)(455,892)
Goodwill, net as of December 31, 2021$434,870 $121,570 $64,439 $620,879 
Goodwill reallocation, net(1)
18,057 (1,417)(16,640)— 
Goodwill recorded in connection with business combinations (2)
1,287 2,082 718 4,087 
Balance as of December 31, 2022:
Goodwill644,238 123,652 312,968 1,080,858 
Accumulated impairment losses(190,024)(1,417)(264,451)(455,892)
Goodwill, net as of December 31, 2022:$454,214 $122,235 $48,517 $624,966 
(1)    The balances shown prior to January 1, 2022 within the Commercial segment related to our Business Advisory segment prior to the modification of our operating model. Effective January 1, 2022, we reallocated a portion of the goodwill, net of accumulated impairment losses within our Business Advisory segment to our Healthcare and Education segments. The remaining goodwill, net of accumulated impairment losses was allocated to our new Commercial segment.
(2) See Note 3 “Acquisitions and Divestitures” for additional information on business combinations completed in 2022, 2021 and 2020.
First Quarter 2022 Goodwill Reallocation and Goodwill Impairment Test
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
  Healthcare 
Business
Advisory
 Education Total
Balance as of December 31, 2017:        
Goodwill $636,810
 $302,187
 $102,829
 $1,041,826
Accumulated impairment losses (208,081) (187,995) —
 (396,076)
Goodwill, net as of December 31, 2017 $428,729
 $114,192
 $102,829
 $645,750
Goodwill recorded in connection with a business combination —
 186
 —
 186
Foreign currency translation —
 (673) —
 (673)
Balance as of December 31, 2018:       
Goodwill 636,810
 301,700
 102,829
 1,041,339
Accumulated impairment losses (208,081) (187,995) —
 (396,076)
Goodwill, net as of December 31, 2018 $428,729
 $113,705
 $102,829
 $645,263
Goodwill recorded in connection with a business combination (1)
 —
 —
 1,060
 1,060
Foreign currency translation —
 357
 —
 357
Balance as of December 31, 2019:       
Goodwill 636,810
 302,057
 103,889
 1,042,756
Accumulated impairment losses (208,081) (187,995) —
 (396,076)
Goodwill, net as of December 31, 2019: $428,729
 $114,062
 $103,889
 $646,680
energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment.
(1)On September 30, 2019, we completed the acquisition of a business in our Education segment. The results of operations of the acquired business is included in our consolidated financial statements and results of operations of our Education segment from the date of acquisition. This acquisition is not significant to our consolidated financial statements.
2019The three reportable segments of Healthcare, Education and Commercial are also our reporting units for goodwill impairment testing purposes. As a result of the reorganization, we reallocated the goodwill balances of our historical reporting units to our new reporting units based on the relative estimated fair values of each component of the historical reporting units to be allocated to the new reporting units. Additionally, we performed a goodwill impairment test on the goodwill balances of each of our reporting units as of January 1, 2022 by comparing the fair value of the reporting unit to its carrying value, including the reallocated goodwill. Based on the results of the goodwill impairment test, we determined the fair values of the Healthcare, Education, and Commercial reporting units exceeded their carrying values by 37%, 199%, and 105%, respectively. As such, we concluded that there was no indication of goodwill impairment for all three reporting units as of January 1, 2022.
We relied on the income approach to estimate the fair value of the reporting units for both the goodwill reallocation and the goodwill impairment test. The income approach utilized a discounted cash flow analysis, which involved estimating the expected after-tax cash flows that will be generated by each business and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted EBITDA margins, and discount rates that reflect the risk inherent in the future cash flows. In estimating future cash flows, we relied on internally generated ten-year forecasts. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.
2022 Annual Goodwill Impairment Test
Pursuant to our policy, we performed our annual goodwill impairment test as of November 30, 2019 on2022 for our fivethree reporting units with goodwill balances:units: Healthcare, Education, Business Advisory, Strategy and Innovation, and Life Sciences.Commercial. We performed a quantitative impairment test for Strategy and Innovation as the reporting unit is a relatively new business resulting from an acquisition in 2017 and also fell slightly short of internal financial expectations in 2019. We performed qualitative assessmentsassessment over the Healthcare, Education, Business Advisory, and Life Sciencesall reporting units to determine if it was more likely than not the respective fair values of these reporting units were less than their carrying amounts, including goodwill.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

For the Strategy and Innovation reporting unit, we reviewed goodwill for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. In estimating the fair value of the reporting unit, we relied on a combination of the income approach and the market approach utilizing the guideline company method, with a fifty-fifty weighting. Based on the results of the goodwill impairment test, we determined the fair value of Strategy and Innovation reporting unit exceeded its carrying value by 41%. As such, we concluded that there is no indication of goodwill impairment for the reporting unit.
For our qualitative assessment, of the Healthcare, Education, Business Advisory and Life Sciences reporting units, we considered the most recent quantitative analysis performed for theseeach reporting units,unit, which was as of November 30, 2017,January 1, 2022, including the key assumptions used within that analysis, the indicated fair values, and the amount by which those fair values exceeded their carrying amounts. One of the key assumptions used within the prior quantitative analysis was our internal financial projections; therefore, we considered the actual performance of each reporting unit during 2019 and 20182022 compared to the internal financial projections used, as well as specific outlooks for each reporting unit based on our most recent internal financial projections. We also considered the market-based valuation multiples used in the market approach within our prior quantitative analysis, which were derived from guideline companies, and noted that the valuation multiples generally increased compared to November 30, 2017. We also reviewed the current carrying value of each reporting unit in comparison to the carrying values as of the prior quantitative analysis. In addition, we considered various factors, including macroeconomic conditions, relevant industry and market trends for each reporting unit, and other entity-specific events, that could indicate a potential change in the fair value of our reporting units or the composition of their carrying values. Based on our assessments, we determined that it was more likely than not that the fair values for each of the Healthcare, Education, Business Advisory and Life Sciencesour reporting units exceeded their respective carrying amounts. As such, the goodwill for theseour reporting units was not considered impaired as of November 30, 2019,2022, and a quantitative goodwill impairment analysis was not necessary.
Further, we evaluated whether any events have occurred or any circumstances have changed since November 30, 20192022 that would indicate goodwill may have become impaired since our annual impairment test. Based on our evaluation as of December 31, 2019,2022, we determined that no indications of impairment arosehave arisen since our annual goodwill impairment test.
The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in non-cash goodwill impairment charges.
2017First Quarter 2020 Goodwill Impairment Charges
Healthcare
DuringThe worldwide spread of the secondCOVID-19 pandemic in the first quarter of 2017,2020 created significant volatility, uncertainty and disruption to the global economy. From the onset of the COVID-19 pandemic, we performedclosely monitored the impact it could have on all aspects of our business, including how we expect it to negatively impact our clients, employees and business partners. While the COVID-19 pandemic did not have a goodwill impairment analysissignificant impact on our consolidated revenues in the first quarter of 2020, we expected it to have an unfavorable impact on sales, increase uncertainty in the backlog and negatively impact full year 2020 results. The services provided by our Strategy and Innovation and Life Sciences reporting units within our legacy Business Advisory segment focus on strategic solutions for healthy, well-capitalized companies to identify new growth opportunities, which may be considered by our Healthcare reporting unit as our Healthcare business was experiencing a prolonged periodclients to be more discretionary in nature, and the duration of declining revenuesthe projects within these practices are typically short-term. Therefore, at the time, primarily drivenonset of the COVID-19 pandemic in the U.S. and due to the uncertainty
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
caused by softness in our revenue cycle offering within our performance improvement solution. This softness was attributable to decreased demandthe pandemic, we were cautious about near-term results for our services, the winding down of some of our larger projects, and a trend toward smaller projects, as well as fewer large integrated projects.these two reporting units. Based on forecasts prepared in the second quarter of 2017 in connection with our quarterly forecasting cycle, we determined that the likely time frame to improve the financial results of this segment would take longer than originally anticipated. As such, we concluded, during the second quarter of 2017, that the fair value of the Healthcare reporting unit may no longer exceed its carrying value. In connection withinternal projections and the preparation of our financial statements for the quarter ended June 30, 2017,March 31, 2020, and considering the expected decrease in demand due to the COVID-19 pandemic, during the first quarter of 2020 we believed it was more likely than not that the fair value of these two reporting units no longer exceeded their carrying values and performed an interim impairment test on the Healthcareboth reporting unit.units as of March 31, 2020.
Our goodwill impairment test was performed by comparing the fair value of each of the HealthcareStrategy and Innovation and Life Sciences reporting unit tounits with its respective carrying value and recognizing an impairment charge for the amount by which the carrying value exceeded the fair value. To estimate the fair value of the Healthcareeach reporting unit, we relied on a combination of the income approach and the market approach utilizing the guideline company method, with a fifty-fifty weighting. Based on the estimated fair valuevalues of the HealthcareStrategy and Innovation and Life Sciences reporting unit,units, we recorded a $208.1 million non-cash pretax goodwill impairment charges of $49.9 million and $9.9 million, respectively, in the first quarter of 2020. The $49.9 million non-cash pretax charge in 2017related to reduce the carrying value of goodwill in our Healthcare reporting unit.
Enterprise SolutionsStrategy and Analytics
Our Enterprise Solutions and AnalyticsInnovation reporting unit was established withreduced the acquisition of Blue Stone International, LLC in 2013. Since that time, we completed five additional business acquisitions within the reporting unit, most recently the acquisitions of the U.S. assets and international assets of ADI Strategies in May 2016 and April 2017, respectively. We record the assets acquired and liabilities assumed in business combinations, including identifiable intangible assets, at their estimated fair values as of the acquisition date, and goodwill is recorded as the excess of the fair value of consideration transferred, including any contingent consideration, over the fair value of the net assets acquired. Therefore, the initial accounting for an acquisition results in its fair value equaling its carrying value. Due to this reporting unit’s relatively low headroom, in the event that the financial performancebalance of the reporting unit did not meet our expectations during 2017, we could be required to take a$37.5 million. The $9.9 million non-cash impairmentpretax charge as a resultrelated to the Life Sciences reporting unit reduced the goodwill balance of any goodwill impairment test. During the first three quarters of 2017,

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

the performance of Enterprise Solutions and Analytics continued to reasonably meet our expectations. However, both revenues and operating margin during the fourth quarter of 2017 fell short of our expectations resulting in a reduction in workforce within the reporting unit during that quarter. Further, in connection with our annual budget process for 2018, which coincided with our annual goodwill impairment test during the fourth quarter of 2017, we determined that the reporting unit's expected future revenue growth rates and operating margin would be lower than previously anticipated for this reporting unit. As a result, our goodwill impairment test indicated that the fair value of the Enterprise Solutions and Analytics reporting unit no longer exceeded its carrying value.
Our goodwill impairment test was performed by comparing the fair value of the Enterprise Solutions and Analytics reporting unit to its carrying value and recognizing an impairment charge for the amount by which the carrying value exceeded the fair value. To estimate the fair value of the Enterprise Solutions and Analytics reporting unit, we relied on a combination of the income approach and the market approach, utilizing the guideline company method, with a fifty-fifty weighting. Based on the estimated fair value of the Enterprise Solutions and Analytics reporting unit, we recorded a $45.0 million non-cash pretax goodwill impairment charge to reduce the carrying value of this reporting unit's goodwill to zero.
Intangible Assets
Intangible assets as of December 31, 20192022 and 20182021 consisted of the following: 
   As of December 31,
   2019 2018
 
Useful Life
in Years
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Customer relationships3 to 13 $87,577
 $61,882
 $98,235
 $60,462
Trade names5 to 6 28,930
 25,894
 28,930
 23,181
Technology and software3 to 5 5,694
 4,321
 5,694
 2,842
Non-competition agreements5 2,220
 1,447
 3,650
 2,241
Customer contracts2 800
 52
 —
 —
Favorable lease contract3 —
 —
 720
 646
Total  $125,221
 $93,596
 $137,229
 $89,372

  As of December 31,
  20222021
 Useful Life
in Years		Gross
Carrying
Amount		Accumulated
Amortization		Gross
Carrying
Amount		Accumulated
Amortization
Customer relationships5 to 13$74,583 $57,219 $75,908 $53,421 
Technology and software2 to 513,330 7,975 13,330 5,607 
Trade names66,000 5,907 6,000 5,148 
Non-competition agreements2 to 5920 340 2,020 1,347 
Customer contracts1— — 260 101 
Total$94,833 $71,441 $97,518 $65,624 
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships and customer contracts, as well as certain trade names and technology and software, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis.
Intangible assets amortization expense was $17.8$11.2 million, $24.0$9.3 million, and $35.0$12.7 million for the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, respectively. The table below sets forth the estimated annual amortization expense for each of the five succeeding years for the intangible assets recorded as of December 31, 2019.2022.
Year Ending December 31, 
Estimated
Amortization Expense
2020 $12,638
2021 $8,379
2022 $6,111
2023 $3,512
2024 $741

Year Ending December 31,Estimated
Amortization Expense
2023$8,122 
2024$4,674 
2025$3,503 
2026$2,519 
2027$1,773 
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.
5. Leases
We lease office space, data centers and certain equipment under operating leases expiring on various dates through 2029, with various renewal options that can extend the lease terms by one to ten years. Our operating leases include fixed payments plus, in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of real estate taxes, insurance and

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

operating expenses. We exclude these variable payments from the measurements of our lease liabilities and expense them as incurred. We elected the practical expedient to combine lease and nonlease components. No lease agreements contain any residual value guarantees or
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
material restrictive covenants. As of December 31, 2019,2022, we have not entered into any material finance leases. We sublease certain office spaces to third parties resulting from restructuring activities in certain locations.
Lease Impairment Charges
Operating lease right-of-use ("ROU"(“ROU”) assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group to which the operating lease ROU asset is assigned may not be recoverable. First, we test the asset group for recoverability by comparing the undiscounted cash flows of the asset group, which include expected future lease and nonlease payments under the lease agreement offset by expected sublease income, to the carrying amount of the asset group. If the first step of the long-lived asset impairment test concludes that the carrying amount of the asset group is not recoverable, we perform the second step of the long-lived asset impairment test by comparing the fair value of the asset group to its carrying amount and recognizing a lease impairment charge for the amount by which the carrying amount exceeds the fair value. To estimate the fair value of the asset group, we rely on a discounted cash flow approach using market participant assumptions of the expected cash flows and discount rate.
During 2019,the years ended December 31, 2022 and 2020, we recorded $0.8recognized non-cash lease-related impairment charges of $0.2 million and $9.1 million, respectively. No lease-related impairment charges were recognized during 2021. The $0.2 million lease-related impairment charge recognized in 2022 resulted from updated sublease assumptions for our previously vacated office space in New York City, New York and was allocated to the operating lease ROU asset. See below for additional information on our 2020 lease impairment charges.
Fourth Quarter 2020 Lease Impairment Charges
In the fourth quarter of 2020, we announced a restructuring plan to reduce operating costs to address the impact of the COVID-19 pandemic on our business. The restructuring plan provided for a reduction in certain leased office spaces which included a portion of our principal executive office in Chicago, Illinois; the remaining portion of our Lake Oswego, Oregon office; our Boston, Massachusetts and Detroit, Michigan offices; and portions of our Denver, Colorado, New York City, New York, and Pensacola, Florida offices. As a result, we recognized $13.2 million of leasenon-cash lease-related impairment charges, for office spaces vacated during the year, of which $0.6$9.1 million was allocated to the operating lease ROU assets and $0.2$4.1 million was allocated to the leasehold improvementsrelated fixed assets based on their relative carrying amounts. The $0.8$13.2 million leaseof non-cash lease-related impairment chargecharges was recognized in restructuring charges on our consolidated statement of operations.
See Note 11 "Restructuring Charges"“Restructuring Charges” for additional information on our restructuring activities.
In the fourth quarter of 2019, we entered into an amendment to the office lease agreement for our principal executive offices in Chicago, Illinois, which resulted in a non-cash gain on lease modification of $0.8 million. Among other items, this amendment i) extends the term of the lease from September 30, 2024 to September 30, 2029; ii) provides a renewal option to extend the lease for an additional five year period to September 30, 2034; iii) terminates the lease with respect to certain leased spaces previously vacated; iv) provides abatement of certain future base rent payments and our pro rata share of operating expenses and taxes; and v) provides a one-time cash payment from the lessor as an incentive.
Additional information on our operating leases as of December 31, 20192022 and 2021 follows.
As of December 31,
Balance Sheet20222021
Operating lease right-of-use assets$30,304 $35,311 
Current maturities of operating lease liabilities$10,530 $10,142 
Operating lease liabilities, net of current portion45,556 54,313 
Total lease liabilities$56,086 $64,455 
Year Ended December 31,
Lease Cost202220212020
Operating lease cost$8,877 $9,755 $11,045 
Short-term leases (1)
263 225 229 
Variable lease costs4,587 3,765 1,693 
Sublease income(1,921)(1,660)(1,973)
Net lease cost (2)(3)
$11,806 $12,085 $10,994 
(1)Includes variable lease costs related to short-term leases.
Balance Sheet December 31, 2019
Operating lease right-of-use assets $54,954
   
Current maturities of operating lease liabilities $7,469
Operating lease liabilities, net of current portion 69,233
Total lease liabilities $76,702

(2)Net lease cost includes $2.0 million, $2.6 million and $0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, recorded as restructuring charges as they relate to vacated office spaces. See Note 11 “Restructuring Charges” for additional information on our vacated office spaces.
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Lease Cost Year Ended
December 31, 2019
Operating lease cost $11,883
Short-term leases (1)
 322
Variable lease costs 3,656
Sublease income (2,638)
Net lease cost (2)(3)(4)
 $13,223
(1)Includes variable lease costs related to short-term leases.
(2)Net lease cost includes $0.4 million for the year ended December 31, 2019, recorded as restructuring charges as they relate to vacated office spaces. See Note 11 "Restructuring Charges" for additional information on our vacated office spaces.
(3)Net lease cost includes $0.3 million for the year ended December 31, 2019, related to vacated office spaces directly related to discontinued operations.
(4)Rent expense, including operating expenses, real estate taxes and insurance, recorded under ASC 840 for the years ended December 31, 2018 and 2017 was $15.1 million and $14.3 million, respectively.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

(3)Net lease cost includes $0.2 million for the year ended December 31, 2020 related to vacated office spaces directly related to discontinued operations.
The table below summarizes the remaining expected lease payments under our operating leases as of December 31, 2019.2022.
Future Lease PaymentsDecember 31,
2022
2023$12,618 
202412,039 
202511,728 
202610,941 
20277,825 
Thereafter7,211 
Total operating lease payments$62,362 
Less: imputed interest(6,276)
Present value of operating lease liabilities
$56,086 
Year Ended December 31,
Other Information202220212020
Cash paid for operating lease liabilities$12,634 $12,573 $11,307 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$1,908 $2,960 $1,456 
Weighted average remaining lease term - operating leases5.3 years6.1 years7.0 years
Weighted average discount rate - operating leases4.2 %4.1 %4.3 %
Future Lease Payments December 31,
2019
2020 $9,772
2021 12,039
2022 11,502
2023 11,470
2024 10,893
Thereafter 35,211
Total operating lease payments $90,887
Less: imputed interest (14,185)
Present value of operating lease liabilities 
 $76,702
6. Property and Equipment, Net
The table below summarizesDepreciation expense for property and equipment was $10.3 million, $11.0 million, and $12.2 million for the future minimum rental commitments, as defined by ASC 840, under our non-cancelable operating leases as ofyears ended December 31, 2018.2022, 2021 and 2020, respectively. During the years ended December 2021 and 2020, we recognized an additional $0.4 million and $0.6 million, respectively, of accelerated depreciation expense for fixed assets related to vacated office spaces. There was no accelerated depreciation expense for fixed assets related to vacated office spaces during 2022. This accelerated depreciation expense is included as a component of restructuring charges. See Note 11“Restructuring Charges” for additional information on our restructuring charges incurred in 2022, 2021 and 2020. Property and equipment, net at December 31, 2022 and 2021 consisted of the following:
 As of December 31,
 20222021
Computers, related equipment, and software$35,296 $33,682 
Leasehold improvements37,202 40,336 
Furniture and fixtures11,386 12,023 
Aircraft— 6,800 
Assets under construction289 1,113 
Property and equipment84,173 93,954 
Accumulated depreciation and amortization(58,066)(62,950)
Property and equipment, net$26,107 $31,004 
In the first quarter of 2022, we completed the sale of the aircraft to a third-party. As a result of the sale, we no longer own any aircraft.
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Lease Payments 
December 31,
2018 (1)
2019 $13,701
2020 12,724
2021 11,590
2022 10,766
2023 10,707
Thereafter 27,033
Total $86,521
(1)As of December 31, 2018, the expected total future minimum sublease income to be received was $10.2 million.
Other Information Year Ended
December 31, 2019
Cash paid for operating lease liabilities $13,902
Operating lease right-of-use assets obtained in exchange for operating lease liabilities $12,842
   
Weighted average remaining lease term - operating leases 7.7 years
Weighted average discount rate - operating leases 4.3%


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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

6. Property and Equipment, Net
Depreciation expense for property and equipment was $13.0 million, $13.4 million, and $13.3 million for the years ended December 31, 2019, 2018, and 2017, respectively. Property and equipment, net at December 31, 2019 and 2018 consisted of the following:
 As of December 31,
 2019 2018
Computers, related equipment, and software$50,251
 $53,116
Leasehold improvements44,323
 45,052
Furniture and fixtures16,273
 17,408
Aircraft7,667
 7,541
Assets under construction250
 250
Property and equipment118,764
 123,367
Accumulated depreciation and amortization(80,351) (82,993)
Property and equipment, net$38,413
 $40,374

7. Financing Arrangements
A summary of the carrying amounts of our debt follows:
 As of December 31,
 2019 2018
1.25% convertible senior notes due 2019$—
 $242,617
Senior secured credit facility205,000
 50,000
Promissory note due 20243,853
 4,368
Total long-term debt$208,853
 $296,985
Current maturities of long-term debt(529) (243,132)
Long-term debt, net of current portion$208,324
 $53,853

Below is a summary of the scheduled remaining principal payments of our debt as of December 31, 2019.
 Principal Payments of Long-Term Debt
2020$529
2021$544
2022$559
2023$575
2024$206,646

Convertible Notes
In September 2014, the Company issued $250 million principal amount of 1.25% convertible senior notes due 2019 (the “Convertible Notes”) in a private offering. The Convertible Notes were governed by the terms of an indenture between the Company and U.S. Bank National Association, as Trustee (the “Indenture”). The Convertible Notes were senior unsecured obligations of the Company and paid interest semi-annually on April 1 and October 1 of each year at an annual rate of 1.25%. The Convertible Notes matured on October 1, 2019. Upon maturity, we refinanced $217.0 million of the principal amount of the outstanding Convertible Notes with the borrowing capacity available under our revolving credit facility and funded the remaining $33.0 million principal payment with cash on hand.
Prior to maturity, upon conversion, the Convertible Notes would have been settled, at our election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. On October 1, 2019, one holder of the Convertible Notes converted their holding, which we settled in cash and resulted in an immaterial gain on conversion.
Upon issuance, we separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does not have an associated convertible feature, assuming our non-

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

convertible debt borrowing rate. The carrying value of the equity component representing the conversion option, which was recognized as a debt discount, was determined by deducting the fair value of the liability component from the proceeds of the Convertible Notes. The debt discount was amortized to interest expense using an effective interest rate of 4.751% over the term of the Convertible Notes. The equity component was not remeasured as it continued to meet the conditions for equity classification.
The transaction costs related to the issuance of the Convertible Notes were separated into liability and equity components based on their relative values, as determined above. Transaction costs attributable to the liability component were recorded as a deduction to the carrying amount of the liability and amortized to interest expense over the term of the Convertible Notes; and transaction costs attributable to the equity component were netted with the equity component of the Convertible Notes in stockholders’ equity. Total debt issuance costs were approximately $7.3 million, of which $6.2 million was allocated to liability issuance costs and $1.1 million was allocated to equity issuance costs.
As of December 31, 2018, the Convertible Notes consisted of the following: 
  As of December 31, 2018
Liability component:  
Proceeds $250,000
Less: debt discount, net of amortization (6,436)
Less: debt issuance costs, net of amortization (947)
Net carrying amount $242,617
Equity component (1)
 $39,287

(1)Included in additional paid-in capital on the consolidated balance sheet.
The following table presents the amount of interest expense recognized related to the Convertible Notes for the periods presented. 
 Year Ended December 31,
 2019 2018 2017
Contractual interest coupon$2,344
 $3,125
 $3,125
Amortization of debt discount6,436
 8,232
 7,851
Amortization of debt issuance costs947
 1,245
 1,224
Total interest expense$9,727
 $12,602
 $12,200

In connection with the issuance of the Convertible Notes, we entered into convertible note hedge transactions and warrant transactions. The convertible note hedge transactions were intended to reduce the potential future economic dilution associated with the conversion of the Convertible Notes and, combined with the warrants, effectively raised the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share. For purposes of the computation of diluted earnings per share in accordance with GAAP, dilution would occur when the average share price of our common stock for a given period exceeds the conversion price of the Convertible Notes, which initially is equal to approximately $79.89 per share. The convertible note hedge transactions and warrant transactions are discussed separately below.
•
Convertible Note Hedge Transactions. In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions whereby the Company had call options to purchase a total of approximately 3.1 million shares of the Company’s common stock, which is the number of shares initially issuable upon conversion of the Convertible Notes in full, at a price of approximately $79.89, which corresponded to the initial conversion price of the Convertible Notes, subject to customary anti-dilution adjustments substantially similar to those in the Convertible Notes. The convertible note hedge transactions were exercisable upon conversion of the Convertible Notes and expired in the third quarter of 2019. We paid an aggregate amount of $42.1 million for the convertible note hedge transactions, which was recorded as additional paid-in capital on the consolidated balance sheet. The convertible note hedge transactions were separate transactions and were not part of the terms of the Convertible Notes.
•
Warrants. In connection with the issuance of the Convertible Notes, the Company sold warrants whereby the holders of the warrants have the option to purchase a total of approximately 3.1 million shares of the Company’s common stock at a strike price of approximately $97.12. The warrants will expire incrementally on 100 different dates from January 6, 2020 to May 28, 2020 and are exercisable at each such expiry date. If the average market value per share of our common stock for the reporting period exceeds the strike price of the warrants, the warrants will have a dilutive effect on our earnings per share. We received

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

aggregate proceeds of $23.6 million from the sale of the warrants, which was recorded as additional paid-in capital on the consolidated balance sheets. The warrants are separate transactions and are not part of the terms of the Convertible Notes or the convertible note hedge transactions.
The Company recorded an initial deferred tax liability of $15.4 million in connection with the debt discount associated with the Convertible Notes and recorded an initial deferred tax asset of $16.5 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset were included in deferred income taxes, net on the consolidated balance sheets.
 As of December 31,
 20222021
Senior secured credit facility$290,000 $230,000 
Promissory note due 2024— 2,780 
Total long-term debt$290,000 $232,780 
Current maturities of long-term debt— (559)
Long-term debt, net of current portion$290,000 $232,221 
Senior Secured Credit Facility
On November 15, 2022, the Company and certain of the Company's subsidiaries entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”). The Company has a $600 million senior secured revolving credit facility, subject toAmended Credit Agreement amended and restated, in its entirety, the terms of a Second Amended and Restated Credit Agreement datedentered into as of March 31, 2015 as amended to date (as amended and modified, the "Amended"Existing Credit Agreement"),. The Amended Credit Agreement consists of a $600 million five-year senior secured revolving credit facility that becomes due and payable in full upon maturity on September 27, 2024.November 15, 2027. The Amended Credit Agreement provides the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount of up to $150$250 million, subject to customary conditions and the approval of any lender whose commitment would be increased, resulting in a maximum available principal amount under the Amended Credit Agreement of $750$850 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under a prior credit agreement,the Existing Credit Agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, acquisitions of businesses, share repurchases, permitted acquisitions, and other general corporate purposes.
Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, two, three or six-month LIBORsix month Term SOFR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.125% per annum and 1.875% per annum, in the case of LIBORTerm SOFR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time.
Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances.circumstances, including upon an Event of Default (as defined in the Amended Credit Agreement). In addition, we have the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The loans and obligations under the Amended Credit Agreement are secured pursuant to a SecondThird Amended and Restated Security Agreement and a SecondThird Amended and Restated Pledge Agreement (the “Pledge Agreement”) with Bank of America, N.A. as collateral agent, pursuant to which the Company and the subsidiary guarantors grant Bank of America, N.A., for the ratable benefit of the lenders under the Amended Credit Agreement, a first-priority lien, subject to permitted liens, on substantially all of the personal property assets of the Company and the subsidiary guarantors, and a pledge of 100% of the stock or other equity interests in all domestic subsidiaries and 65% of the stock or other equity interests in each “material first-tier foreign subsidiary” (as defined in the Pledge Agreement). entitled to vote and 100% of the stock or other equity interests in each material first-tier foreign subsidiary not entitled to vote.
The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) of 3.75 to 1.00; however the maximum permitted Consolidated Leverage Ratio will increase to 4.004.25 to 1.00 upon the occurrence of certain transactions,a Qualified Acquisition (as defined in the Amended Credit Agreement), and (ii) a minimum Consolidated Interest Coverage Ratio (defined as the ratio of consolidated EBITDA to interest) of 3.503.00 to 1.00. Consolidated EBITDA for purposes of the financial covenants is calculated on a continuing operations basis and includes adjustments to add back non-cash goodwill impairment charges, share-based compensation costs, certain non-cash restructuring charges, pro forma historical EBITDA for businesses acquired, and other specified items in accordance with the Amended Credit Agreement. For purposes of the Consolidated Leverage Ratio total debt is on a gross basis and is not netted against our cash balances. At December 31, 2019,2022, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 1.641.92 to 1.00 and a Consolidated Interest Coverage Ratio of 15.2914.04 to 1.00.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
Borrowings outstanding under the Amended Credit Agreement at December 31, 20192022 totaled $205.0 million. These borrowings$290.0 million and carried a weighted average interest rate of 3.0%3.8%, including the impacteffect of the interest rate swapswaps described in Note 12 “Derivative Instruments and Hedging Activity."” Borrowings outstanding under the AmendedExisting Credit Agreement at December 31, 20182021 were $50.0$230.0 million and carried a weighted average interest rate of 3.7%2.7%, including the impacteffect of the interest rate swap describedswaps in Note 12 "Derivative Instruments and Hedging Activity."effect at that time. The borrowing capacity under the revolving credit facility is reduced by any outstanding borrowings under the revolving credit facility and outstanding letters of credit. At December 31, 2019,2022, we had outstanding letters of credit totaling $1.7$0.7 million, which are primarily used as security deposits for our office facilities. As of December 31, 2019,2022, the unused borrowing capacity under the revolving credit facility was $393.3$309.3 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

Promissory Note due 2024
InOn June 30, 2017, in conjunction with our purchase of an aircraft related to the acquisition of Innosight, we assumed from the sellers of the aircraft, a promissory note with an outstanding principal balance of $5.1 million. TheIn the first quarter of 2022, we completed the sale of the aircraft to a third-party and used a portion of the sale proceeds to pay the remaining principal and unpaid interest on the promissory note. Prior to the repayment of the promissory note, the principal balance of the promissory note iswas subject to scheduled monthly principal payments until the maturity date of March 1, 2024, at which time a final payment of $1.5 million, plus any accrued and unpaid interest, will be due.2024. Under the terms of the promissory note, we will paypaid interest on the outstanding principal amount at a rate of one month LIBOR plus 1.97% per annum. The obligations under the promissory note are secured pursuant to a Loan and Aircraft Security Agreement with Banc of America Leasing & Capital, LLC, which grants the lender a first priority security interest in the aircraft. At December 31, 2019,2021, the outstanding principal amount of the promissory note was $3.9 million. As of December 31, 2019, the aircraft had a carrying amount of $5.1 million. At December 31, 2018, the outstanding principal amount of the promissory note was $4.4$2.8 million, and the aircraft had a carrying amount of $5.8$3.7 million. As a result of the sale, we recognized a gain of $1.0 million in the first quarter of 2022 and we no longer own any aircraft.
8. Capital Structure
Preferred Stock
We are authorized to issue up to 50,000,000 shares of preferred stock. Our certificate of incorporation authorizes our board of directors, without any further stockholder action or approval, to issue these shares in one or more classes or series, to establish from time to time the number of shares to be included in each class or series, and to fix the rights, preferences and privileges of the shares of each wholly unissued class or series and any of its qualifications, limitations or restrictions. As of December 31, 20192022 and 2018,2021, no such preferred stock has been approved or issued.
Common Stock
We are authorized to issue up to 500,000,000 shares of common stock, par value $.01 per share. The holders of common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders. Subject to the rights and preferences of the holders of any series of preferred stock that may at the time be outstanding, holders of common stock are entitled to such dividends as our board of directors may declare. In the event of any liquidation, dissolution or winding-up of our affairs, after payment of all of our debts and liabilities and subject to the rights and preferences of the holders of any series of preferred stock that may at the time be outstanding, holders of common stock will be entitled to receive the distribution of any of our remaining assets.
9. Revenues
For the years ended December 31, 2019, 20182022, 2021 and 20172020 we recognized revenues of $876.8 million,$795.1$1.13 billion, $905.6 million, and $732.6$844.1 million, respectively. Of the $876.8 million$1.13 billion recognized in 2019,2022, we recognized revenues of $2.8 million from obligations satisfied, or partially satisfied, in prior periods due to the release of allowances on unbilled services as a result of securing contract amendments. During 2019, we recognized a $1.0 million decrease to revenues due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $795.1 million recognized in 2018, we recognized revenues of $10.8$7.6 million from obligations satisfied, or partially satisfied, in prior periods, of which $7.2$5.3 million was primarily due to changes in the estimates of our variable consideration under performance-based billing arrangements and $3.6$2.3 million was primarily due to the release of allowances on receivables from clients and unbilled servicesservices. Of the $905.6 million recognized in 2021, we recognized revenues of $22.9 million from obligations satisfied, or partially satisfied, in prior periods, of which $14.6 million was primarily due to securing contract amendments.changes in the estimates of our variable consideration under performance-based billing arrangements and $8.3 million was primarily due to the release of allowances on receivables from clients and unbilled services. Of the $844.1 million recognized in 2020, we recognized revenues of $12.2 million from obligations satisfied, or partially satisfied, in prior periods, of which $7.5 million was primarily due to changes in the estimates of our variable consideration under performance-based billing arrangements and $4.7 million was primarily due to the release of allowances on receivables from clients and unbilled services.
As of December 31, 2019,2022, we had $90.1$151.2 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude obligations under contracts with an original expected duration of one year or less, variable consideration which has been excluded from the total transaction price due to the constraint and performance obligations under time-and-expense engagements which are recognized in the amount invoiced. Of the $90.1$151.2 million of performance obligations, we expect to recognize approximately $58.1$78.7 million as revenue in 2020, $20.92023, $30.1 million in 2021,2024, and the remaining $11.1$42.4 million thereafter. Actual revenue recognition could differ from these amounts as a result of changes in the estimated timing of work to be performed, adjustments to estimated variable consideration in performance-based arrangements, or other factors.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
Contract Assets and Liabilities
The payment terms and conditions in our customer contracts vary. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the consolidated balance sheets.
Unbilled services include revenues recognized for services performed but not yet billed to clients. Services performed that we are not yet entitled to bill because certain events, must occur, such as the completion of the measurement period or client approval in performance-based engagements, must occur are recorded as contract assets and included within unbilled services, net. The contract asset balance as of December 31, 20192022 and 20182021 was $12.6$50.2 million and $9.1$23.7 million, respectively. The $3.5$26.5 million increase primarily reflects timing differences between the completion of our performance obligations and the amounts billed or billable to clients in accordance with their contractual billing terms.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

Client prepayments and retainers are classified as deferred revenues and recognized over future periods in accordance with the applicable engagement agreement and our revenue recognition accounting policy. Our deferred revenues balance as of December 31, 20192022 and December 31, 20182021 was $28.4$21.9 million and $28.119.2 million respectively. The $0.3$2.7 million increase primarily reflects timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the year ended December 31, 2019, $22.82022, $18.5 million of revenues recognized were included in the deferred revenue balance as of December 31, 2018.2021. For the year ended December 31, 2018, $23.52021, $27.6 million of revenues recognized were included in the deferred revenue balance as of December 31, 2017.2020.
10. Earnings Per Share
Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, excluding unvested restricted common stock. Diluted earnings per share reflects the potential reduction in earnings per share that could occur if securities or other contracts to issue common stock were exercised or converted into common stock under the treasury stock method. Such securities or other contracts include unvested restricted stock awards, unvested restricted stock units, and outstanding common stock options, convertible senior notes, and outstanding warrants, to the extent dilutive. In periods for which we report a net loss from continuing operations, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss from continuing operations per share would be anti-dilutive.
Earnings (loss) per share under the basic and diluted computations are as follows: 
 Year Ended December 31,
 2019 2018 2017
Net income (loss) from continuing operations$41,979
 $13,944
 $(170,505)
Income (loss) from discontinued operations, net of tax(236) (298) 388
Net income (loss)$41,743
 $13,646
 $(170,117)
      
Weighted average common shares outstanding—basic21,993
 21,706
 21,439
Weighted average common stock equivalents514
 352
 —
Weighted average common shares outstanding—diluted22,507
 22,058
 21,439
      
Net earnings (loss) per basic share:     
Net income (loss) from continuing operations$1.91
 $0.64
 $(7.95)
Income (loss) from discontinued operations, net of tax(0.01) (0.01) 0.02
Net income (loss)$1.90
 $0.63
 $(7.93)
      
Net earnings (loss) per diluted share:     
Net income (loss) from continuing operations$1.87
 $0.63
 $(7.95)
Income (loss) from discontinued operations, net of tax(0.02) (0.01) 0.02
Net income (loss)$1.85
 $0.62
 $(7.93)
The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were as follows:
 As of December 31,
 2019 2018 2017
Unvested restricted stock awards—
 —
 636
Outstanding common stock options—
 —
 194
Convertible senior notes—
 3,129
 3,129
Warrants related to the issuance of convertible senior notes3,129
 3,129
 3,129
Total anti-dilutive securities3,129
 6,258
 7,088


 Year Ended December 31,
 202220212020
Net income (loss) from continuing operations$75,552 $62,987 $(23,718)
Loss from discontinued operations, net of tax— — (122)
Net income (loss)$75,552 $62,987 $(23,840)
Weighted average common shares outstanding—basic20,249 21,439 21,882 
Weighted average common stock equivalents497 370 — 
Weighted average common shares outstanding—diluted20,746 21,809 21,882 
Net earnings (loss) per basic share:
Net income (loss) from continuing operations$3.73 $2.94 $(1.08)
Loss from discontinued operations, net of tax— — (0.01)
Net income (loss)$3.73 $2.94 $(1.09)
Net earnings (loss) per diluted share:
Net income (loss) from continuing operations$3.64 $2.89 $(1.08)
Loss from discontinued operations, net of tax— — (0.01)
Net income (loss)$3.64 $2.89 $(1.09)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

See Note 7 “Financing Arrangements” for further information onThe number of anti-dilutive securities excluded from the convertible senior notescomputation of the weighted average common stock equivalents presented above at December 31, 2022, 2021 and warrants2020 was 0.2 million, 0.1 million and 1.1 million, respectively, and related to the issuanceunvested restricted stock and outstanding common stock options.
Share Repurchase Programs
In November 2020, our board of convertible notes.
We currently havedirectors authorized a share repurchase program (the "2020 Share Repurchase Program") permitting us to repurchase up to $50 million of our common stock through December 31, 2021. The 2020 Share Repurchase Program was authorized subsequent to the expiration of our prior share repurchase program (the “2015 Share Repurchase Program”) on October 31, 2020. The 2015 Share Repurchase Program permitted us to repurchase up to $125 million of our common stock through October 31, 2020. The 2020 (the "ShareShare Repurchase Program").Program has been subsequently extended and increased, most recently in the fourth quarter of 2022. The current authorization extends the share repurchase program through December 31, 2023 with a repurchase amount of $300 million. The amount and timing of repurchases under the repurchasesshare repurchase programs were and will continue to be determined by management and will depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. In 2019,
During 2022, we repurchased and retired 210,4372,037,752 shares for $14.2$121.3 million ofunder the 2020 Share Repurchase Program, including 15,200 shares for $1.1 million which $1.2 million settled in the first quarter of 2020. All2023. Additionally, during the first quarter of 2022, we settled the 210,437repurchase of 3,820 shares for $0.2 million that were accrued as of December 31, 2021. During 2021, we repurchased and retired 1,265,261 shares for $64.8 million under the 2020 Share Repurchase Program, including the 3,820 shares for $0.2 million which settled in 2019the first quarter of 2022. During 2020, we repurchased and retired 313,998 shares for $20.9 million under the 2015 Share Repurchase Program and 111,166 shares for $5.0 million under the 2020 Share Repurchase Program. Additionally, during the first quarter of 2020, we settled the repurchase of 18,000 shares for $1.2 million that were includedaccrued as a reduction to our basic weighted average shares outstanding for the year endedof December 31, 2019 based on the trade date of the share repurchase. No shares were repurchased under this program in 2018 or 2017.2019. As of December 31, 2019, $20.92022, $108.9 million remainsremained available for share repurchases.repurchases under our share repurchase program.
11. Restructuring Charges
20192022
In 2019,2022, we incurred $1.9$9.9 million of total pretax restructuring expense. This expense, primarilywhich consisted of the following charges:
SeveranceEmployee Costs - We incurred $0.6$5.7 million of severance expense as a result of workforce reductions to better align resources with market demand and workforce reductions in our corporate operations.
Office exit costs - We incurred $1.2 million of office exit costs. During 2019, we exited a portion of our Lake Oswego, Oregon office resulting in a $0.7 million lease impairment charge on the related operating lease right-of-use asset and leasehold improvements and $0.2 million of accelerated depreciation on furniture and fixtures in that office. The lease impairment charge was recognized in accordance with ASC 842, Leases, which we adopted on a modified retrospective basis on January 1, 2019. See Note 2 "Summary of Significant Accounting Policies" for additional information on our adoption of ASC 842. See Note 5 "Leases" for additional information on the long-lived asset impairment test. Additionally, during 2019, we exited the remaining portion of our Middleton, Wisconsin office and an office in Houston, Texas, resulting inseverance-related restructuring charges of $0.4 million and $0.1 million, respectively, which primarily consisted of accelerated depreciation on furniture and fixtures in those offices. During the fourth quarter of 2019, we entered into an amendment to the lease of our principal executive offices in Chicago, Illinois. Among other items, the amendment terminated the lease with respect to certain leased space which we previously vacated and currently sublease to a third-party. As a result of the amendment, we recognized a restructuring gain of $0.4 million. See Note 5 "Leases" for additional information on the amendment.
Of the $1.9 million pretax restructuring charge, $1.5 million related to our corporate operations, $0.3 million related to our Healthcare segment, and $0.1 million related to our Business Advisory segment.
2018
In 2018, we incurred $3.7 million of pretax restructuring expense. This expense primarily consisted of the following charges:
Severance - We incurred $2.1 million of severance expense as a result of workforce reductions to better align resources with market demand.
Office exit costsspace reductions - We incurred $1.3$2.5 million of restructuring expense related to office exit costs. Of the $1.3 million, $0.8space reductions, of which $2.3 million related to the accrual of remaining lease payments,rent and related expenses, net of estimated sublease income, accelerated depreciation on leasehold improvements,for previously vacated office spaces and moving expenses due to exiting a portion of our Middleton, Wisconsin office; $0.4$0.2 million related to a non-cash lease impairment charge driven by updated lease assumptions, commission costs, and moving expenses for our San Francisco office vacated in 2017; and $0.1 million related to updated leasesublease assumptions for our Chicagoa previously vacated office consolidation. The office exit costs incurred in the 2018 were accounted for in accordance with ASC 840, Leases.space.
Other - We incurred $1.7 million of other restructuring charges, of which $0.7 million related to third-party professional advisory fees related to the modification of our operating model, $0.6 million related to the early termination of a contract, $0.3 million related to the accelerated amortization of capitalized software implementation costs for a cloud-computing arrangement that is no longer in use, and $0.1 million related to the divestiture of our Middle East practice within the Business Advisory segmentLife Sciences business in the secondfourth quarter of 2018. During2021.
Of the second quartertotal $9.9 million pretax restructuring charge, $3.9 million was recognized in our Education segment, $3.7 million was recognized in our corporate operations, $1.6 million was recognized in our Commercial segment, and $0.7 million was recognized in our Healthcare segment.
2021
In 2021, we incurred $12.4 million of 2018,total pretax restructuring expense. Of the $12.4 million pretax restructuring expense, $8.5 million related to the divestiture of our Life Sciences business. On November 1, 2021, we sold our Middle East practicecompleted the sale of the Life Sciences business to a former employee who was the practice leader of that business at the time,third-party, and we recordedrecognized a $5.8$31.5 million losspre-tax gain which is included inwithin other income (expense), net inon our consolidated statementsstatement of operations.
Of the $3.7 millionThe total pretax restructuring charge, $1.1expense of $12.4 million was related to our Healthcare segment, $1.0 million was related to our Business Advisory segment, and $1.6 million was related to our corporate operations.
2017
In 2017, we incurred $6.2 million of pretax restructuring expense. This expense primarilyrecognized in 2021 consisted of the following charges:

Employee Costs - We incurred $8.1 million of employee-related restructuring expense, of which $6.8 million related to transaction-related employee payments made in connection with the divestiture of our Life Sciences businesses and $1.3 million related to other employee-related expenses.
Office space reductions - We incurred $3.1 million of restructuring expense related to office space reductions, of which $2.3 million related to rent and related expenses, net of sublease income, and accelerated depreciation on furniture and fixtures for previously vacated office
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(Tabular amounts in thousands, except per share amounts)

spaces and $0.8 million related to accelerated amortization and depreciation on the operating lease ROU asset and fixed assets related to our London, U.K. office which we vacated in connection with the divestiture of our Life Sciences business.
SeveranceOther - We incurred $3.7$1.2 million of severanceother restructuring charges, of which $0.9 million related to third-party legal and professional advisory fees incurred in connection with the divestiture of our Life Sciences business and $0.2 million related to third-party professional advisory fees related to the modification of our operating model.
Of the total $12.4 million pretax restructuring charge, $7.7 million was recognized in the Commercial segment, $4.5 million was recognized in our corporate operations, $0.1 million was recognized in our Healthcare segment, and $0.1 million was recognized in our Education segment.
2020
In 2020, we incurred $20.5 million of total pretax restructuring expense. Of the $20.5 million pretax restructuring expense, as a result$18.7 million related to the restructuring plan executed in the fourth quarter of 2020 to reduce operating costs to address the impact of the COVID-19 pandemic on our business. The total pretax restructuring expense of $20.5 million recognized in 2020 consisted of the following charges:
Employee Costs - We incurred $5.3 million of severance-related restructuring expense, of which, $4.8 million related to the fourth quarter 2020 restructuring plan and $0.4 million related to workforce reductions completed prior to the fourth quarter of 2020 to better align resources with market demand and workforce reductions in our corporate operations.demand.
Office exit costsspace reductions - We incurred $2.4$14.0 million of restructuring expense related to office exit costsspace reductions, which primarily related to the accrualfourth quarter 2020 restructuring plan. The fourth quarter 2020 restructuring plan provided for a reduction in certain leased office spaces which included a portion of our principal executive office in Chicago, Illinois; the remaining portion of our Lake Oswego, Oregon office; our Boston, Massachusetts and Detroit, Michigan offices; and portions of our Denver, Colorado, New York City, New York, and Pensacola, Florida offices. As a result, we recognized $13.2 million of non-cash lease obligations,impairment charges on the related operating lease ROU assets and fixed assets for those we intend to sublease, as well as $0.7 million of accelerated amortization and depreciation on the related operating lease ROU assets and fixed assets we abandoned. See Note 5 “Leases” for additional information on the long-lived asset impairment test performed in 2020. We also incurred $0.1 million related to rent and related expenses, net of estimated sublease income, duefor previously vacated office spaces.
Other - We incurred $1.2 million of other restructuring charges primarily related to relocating our San Francisco office toan accrual for the termination of a smaller space and consolidating our Chicago and New York offices, and accelerated depreciation on leasehold improvements for our San Francisco office. The office exit costs incurred in the 2017 were accounted for in accordance with ASC 840, Leases.third-party advisor agreement.
Of the $6.2total $20.5 million pretax restructuring charge, $2.1$14.8 million was related to our Healthcare segment, $1.1 million was related to our Business Advisory segment, and $2.9 million was related to our corporate operations.operations, $2.1 million was recognized in our Commercial segment, $1.8 million was recognized in our Education segment, and $1.8 million was recognized in our Healthcare segment.
The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the years ended December 31, 20192022 and 2018.
2021.
 Employee Costs Office Space Reductions Other Total
Balance as of December 31, 2017$1,267
 $4,247
 $—
 $5,514
Additions (1) (2)
2,102
 677
 191
 2,970
Payments(2,879) (3,284) (191) (6,354)
Adjustments (1) (2)
(47) 828
 —
 781
Balance as of December 31, 2018443
 2,468
 —
 2,911
Adoption of ASC 842 (3)
—
 (1,119) —
 (1,119)
Balance as of January 1, 2019443
 1,349
 —
 1,792
Additions (2)
636
 9
 —
 645
Payments(995) (383) —
 (1,378)
Adjustments (2)
(16) (884) —
 (900)
Balance as of December 31, 2019$68
 $91
 $—
 $159
Employee CostsOffice Space ReductionsOtherTotal
Balance as of December 31, 2020$2,447 $84 $893 $3,424 
Additions (1)
8,132 — 1,156 9,288 
Payments(9,993)(84)(1,482)(11,559)
Adjustments (1)
(13)— — (13)
Balance as of December 31, 2021573 — 567 1,140 
Additions (1)
5,705 — 1,279 6,984 
Payments(2,538)(201)(1,318)(4,057)
Adjustments (1)
11 201 40 252 
Balance as of December 31, 2022$3,751 $— $568 $4,319 
(1)
Additions and adjustments for the years ended December 31, 2019 and 2018 include restructuring charges of $0.1 million and $0.4 million, respectively related to office exit costs for vacated offices spaces directly related to discontinued operations.
(2)Additions and adjustments exclude non-cash items related to vacated office spaces, such as lease impairment charges and accelerated depreciation on fixed assets, which are recorded as restructuring charges on our consolidated statements of operations.
(3)Upon adoption of ASC 842 on January 1, 2019, we reclassified the restructuring charge liabilities, which represented the present value of remaining lease payments, net of estimated sublease income, for vacated office spaces from restructuring charge liabilities to operating lease right-of-use assets. See Note 2 "Summary of Significant Accounting Polices" for additional information on the impact of adoption.
The $0.1 million restructuring charge liability related to vacated office space reductions at December 31, 2019 is includedspaces, such as a component of deferred compensationlease impairment charges and other liabilities. The $0.1 million restructuring charge liability related to employee costs at December 31, 2019 is expected to be paid in the next 12 monthsaccelerated depreciation on abandoned operating lease ROU assets and is included as a component of accrued payroll and related benefits.
12. Derivative Instruments and Hedging Activity
On June 22, 2017, we entered into a forward interest rate swap agreement effective August 31, 2017 and ending August 31, 2022, with a notional amount of $50.0 million. We entered into this derivative instrument to hedge against the interest rate risks of our variable-rate borrowings. Under the terms of the interest rate swap agreement, we receive from the counterparty interest on the notional amount based on one month LIBOR and we pay to the counterparty a fixed rate of 1.900%.
We recognize all derivative instruments as either assets, or liabilities at fair value on the balance sheet. We have designated this derivative instrument as a cash flow hedge. Therefore, changes in the fair value of the derivative instrumentwhich are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified into interest expense upon settlement. Asas restructuring charges on our consolidated statements of December 31, 2019, it was anticipated that $0.1 million of the losses, net of tax, currently recorded in accumulated other comprehensive income will be reclassified into earnings within the next 12 months.

operations.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

All of the $3.8 million restructuring charge liability related to employee costs at December 31, 2022 is expected to be paid in the next 15 months and is included as a component of accrued payroll and related benefits and deferred compensation and other liabilities. All of the $0.6 million other restructuring charge liability at December 31, 2022 is expected to be paid in the next 12 months and is included as a component of accrued expenses and other current liabilities.
12. Derivative Instruments and Hedging Activity
In the normal course of business, we use forward interest rate swaps to manage the interest rate risk associated with our variable-rate borrowings under our senior secured credit facility and we use non-deliverable foreign exchange forward contracts to manage the foreign currency exchange rate risk related to our operations in India. We do not use derivative instruments for trading or other speculative purposes.
We have designated all of our derivative instruments as cash flow hedges. Therefore, changes in the fair value of the interest rate swaps and foreign exchange forward contracts are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified to earnings upon settlement.
Interest Rate Swaps
As of December 31, 2022 and 2021, we were party to forward interest rate swap agreements with an aggregate notional amount of $200.0 million. In the fourth quarter of 2022, in conjunction with the amendment to our senior secured credit facility which, among other items, amended the base rate of our variable-rate borrowings from LIBOR to Term SOFR, we updated the reference rate within our interest rate swap agreements from LIBOR to Term SOFR. Under the terms of the updated interest rate swap agreements, we receive from the counterparty interest on the notional amount based on one month Term SOFR and we pay to the counterparty a stated, fixed rate. Prior to updating our interest rate swap agreements, we received from the counterparty interest on the notional amount based on one month LIBOR and we paid to the counterparty a stated, fixed rate. The forward interest rate swap agreements in effect as of December 31, 2022 have staggered maturities through August 31, 2027.
As of December 31, 2022, it was anticipated that $4.8 million of the gains, net of tax, related to interest rate swaps currently recorded in accumulated other comprehensive income will be reclassified into interest expense, net of interest income in our consolidated statement of operations within the next 12 months.
Foreign Exchange Forward Contracts
As of December 31, 2022, we were party to non-deliverable foreign exchange forward contracts with an aggregate notional amount of INR 657.9 million, or $8.0 million based on the exchange rate in effect as of December 31, 2022. These foreign exchange forward contracts will mature monthly through September 2023 to hedge a portion of our forecasted monthly Indian Rupee-denominated expenses against foreign currency fluctuation with the United States dollar.
As of December 31, 2022, it was anticipated that $0.1 million of the losses, net of tax, related to foreign exchange forward contracts currently recorded in accumulated other comprehensive income will be reclassified into direct costs in our consolidated statement of operations within the next 12 months.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
The table below sets forth additional information relating to our interest rate swap designated as a cash flow hedging instrumentderivative instruments as of December 31, 20192022 and 2018.2021. 
 
Fair Value (Derivative Asset and Liability)
As of December 31,
Balance Sheet Location2019 2018
Prepaid expenses and other current assets$—
 $302
Other non-current assets$—
 $451
Accrued expenses$159
 $—
Deferred compensation and other liabilities$387
 $—

 Fair Value 
Derivative InstrumentBalance Sheet LocationDecember 31, 2022December 31, 2021
Interest rate swapsPrepaid expenses and other current assets$7,108 $— 
Interest rate swapsOther non-current assets5,131 1,210 
Total Assets$12,239 $1,210 
Interest rate swapsAccrued expenses and other current liabilities$— $1,604 
Interest rate swapsDeferred compensation and other liabilities— 149 
Foreign exchange forward contractsAccrued expenses and other current liabilities120 — 
Total Liabilities$120 $1,753 
All of our derivative instruments are transacted under the International Swaps and Derivatives Association (ISDA) master agreements. These agreements permit the net settlement of amounts owed in the event of default and certain other termination events. Although netting is permitted, it is our policy to record all derivative assets and liabilities on a gross basis on our consolidated balance sheet.
We do not use derivative instruments for trading or other speculative purposes. Refer to Note 14 “Other Comprehensive Income (Loss)” for additional information on our derivative instrument.instruments.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
13. Fair Value of Financial Instruments
Certain of our assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used in measuring fair value and requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three levels based on the objectivity of the inputs as follows:
Level 1 InputsQuoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 InputsQuoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 InputsUnobservable inputs for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.


The tables below sets forth our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 20192022 and 2018.2021.
 Level 1 Level 2 Level 3 Total
December 31, 2019       
Assets:       
Convertible debt investment$—
 $—
 $49,542
 $49,542
Deferred compensation assets—
 27,445
 —
 27,445
Total assets$—
 $27,445
 $49,542
 $76,987
Liabilities:       
Interest rate swap$—
 $546
 $—
 $546
Total liabilities$—
 $546
 $—
 $546


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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

 Level 1 Level 2 Level 3 Total
December 31, 2018       
Assets:       
Interest rate swap$—
 $753
 $—
 $753
Convertible debt investment—
 —
 50,429
 50,429
Deferred compensation assets—
 18,205
 —
 18,205
Total assets$—
 $18,958
 $50,429
 $69,387
Liabilities:       
Contingent consideration for business acquisitions$—
 $—
 $11,441
 $11,441
Total liabilities$—
 $—
 $11,441
 $11,441

Level 1Level 2Level 3Total
December 31, 2022
Assets:
Interest rate swap$— $12,239 $— $12,239 
Convertible debt investment— — 57,563 57,563 
Deferred compensation assets— 29,875 — 29,875 
Total assets$— $42,114 $57,563 $99,677 
Liabilities:
Foreign exchange forward contracts$— $120 $— $120 
Contingent consideration for business acquisition— — 3,190 3,190 
Total liabilities$— $120 $3,190 $3,310 
December 31, 2021
Assets:
Interest rate swap$— $627 $— $627 
Convertible debt investment— — 65,918 65,918 
Deferred compensation assets— 39,430 — 39,430 
Total assets$— $40,057 $65,918 $105,975 
Liabilities:
Interest rate swaps$— $1,170 $— $1,170 
Contingent consideration for business acquisition— — 3,743 3,743 
Total liabilities$— $1,170 $3,743 $4,913 
Interest rate swap:swaps: The fair valuevalues of our interest rate swap wasswaps were derived using estimates to settle the interest rate swap agreement,agreements, which isare based on the net present value of expected future cash flows on each leg of the swap utilizing market-based inputs and discount rates reflecting the risks involved. See Note 12 "Derivative Instruments and Hedging Activity" for additional information on our interest rate swaps.
Foreign exchange forward contracts: The fair values of our foreign exchange forward contracts were derived using estimates to settle the foreign exchange forward contracts agreements, which are based on the net present value of expected future cash flows on each contract utilizing market-based inputs, including both forward and spot prices, and a discount rate reflecting the risks involved. Refer to Note 12 “Derivative Instruments and Hedging Activity” for additional information on our foreign exchange forward contracts.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
Convertible debt investment: InSince 2014, and 2015, we have invested $27.9$40.9 million, in the form of zero coupon1.69% convertible debt (the "initial convertible notes"), in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight, a U.S.-based company that partners with leading nonprofit universities to increase access to and retention of international students, boost institutional growth, and enhance an institution’s global footprint. In the second quarter of 2019,Effective December 31, 2022, we amended the initial investment to, among other items, extend the maturity date by one yearfrom January 17, 2024 to July 1, 2021,January 17, 2027, unless converted earlier. In the first quarter of 2020, we invested an additional $13.0 million, in the form of 1.69% convertible debt with a senior liquidation preference to the initial convertible notes (the "additional convertible note"); and amended our initial convertible notes to extend the maturity date to January 17, 2024, which coincides with the maturity date of the additional convertible note.
To determine the appropriate accounting treatment for our initial investment, we performed a variable interest entity (“VIE”) analysis and concluded that Shorelight does not meet the definition of a VIE. We also reviewed the characteristics of our investment to confirm that the convertible notes are not in-substance common stock that would warrant equity method accounting. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment to be that of an available-for-sale debt security. We continue to monitor the key factors of our VIE analysis and the terms of the convertible notes to ensure our accounting treatment is appropriate. We have not identified any changes to Shorelight or our investment, including the amendment effective in the fourth quarter of 2022, that would change our classification of the investment as an available-for-sale debt security.
The investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. We estimate the fair value of our investment using a scenario-based approach in the form of a hybrid analysis that consists of a Monte Carlo simulation model and an expected return analysis. The conclusion of value for our investment is based on the probability-weighted assessment of both scenarios. The hybrid analysis utilizes certain assumptions related toincluding the assumed holding period through the maturity date, which was January 17, 2027 and January 17, 2024 for the valuations performed as of December 31, 2022 and 2021, respectively; the applicable waterfall distribution at the end of the expected holding period based on the rights and privileges of the various instruments,instruments; cash flow projections discounted at the risk-adjusted rate of 24.0% and 22.5% as of December 31, 2022 and 2021, respectively; and the concluded equity volatility of 40.0% and 45.0% as of December 31, 2022 and 2021, all of which are Level 3 inputs. The valuation of our investment as of December 31, 2019 takes into consideration the equity value indication as well as the dilutive impact of the convertible debt issued by Shorelight in the first quarter of 2020, the terms of which were known or knowable as of December 31, 2019. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the investment, which would result in different impacts to our consolidated balance sheet and comprehensive income. Actual results may differ from our estimates. The fair value of the convertible debt investment is recorded in long-term investments on our consolidated balance sheets.
The table below sets forth the changes in the balance of the convertible debt investment for the years ended December 31, 20192022 and 2018.
2021.
  Convertible Debt Investment
Balance as of December 31, 2017 $39,904
Change in fair value of convertible debt investment 10,525
Balance as of December 31, 2018 50,429
Change in fair value of convertible debt investment (887)
Balance as of December 31, 2019 $49,542
Convertible Debt Investment
Balance as of December 31, 2020$64,364 
Change in fair value of convertible debt investment1,554 
Balance as of December 31, 202165,918 
Change in fair value of convertible debt investment(8,355)
Balance as of December 31, 2022$57,563 
Deferred compensation assets: We have a non-qualified deferred compensation plan (the "Plan"“Plan”) for the members of our board of directors and a select group of our employees. The deferred compensation liability is fully funded by the Plan assets, which consist of life insurance policies maintained within a trust. The cash surrender value of the life insurance policies approximates fair value and is based on third-party broker statements which provide the fair value of the life insurance policies' underlying investments, which are Level 2 inputs. The cash surrender

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

value of the life insurance policies is invested primarily in mutual funds. The Plan assets are included in other non-current assets on our consolidated balance sheets. Realized and unrealized gains (losses) from the deferred compensation assets are recorded to other income (expense), net in our consolidated statements of operations.
Contingent consideration for business acquisitions: We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted assessment of the specific financial performance targets being measured or a Monte Carlo simulation model, as appropriate. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 inputs. The significant unobservable inputs used in the fair value measurements of our contingent consideration are our measures of the estimated payouts based on internally generated financial projections on a probability-weighted basis and a discount rates,rate which typically reflectwas 5.5% as of December 31, 2022. As of December 31, 2021, the discount rate used in the fair value measurements of our contingent consideration was in a risk-free rate.range of 2.4% to 5.1% with a weighted average of 3.7%. The weighted average discount rate was calculated using the relative fair values of the contingent consideration as of December 31, 2021. The fair value of the contingent consideration is reassessed quarterly based on assumptions used in our latest projections and input provided by practice leaders and management. Any change in the fair value estimate is recorded in our consolidated statement of operations for that period. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of our contingent consideration liability, which would result in different impacts to our consolidated balance sheets and consolidated statements of operations. Actual results may differ from our estimates.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the years ended December 31, 20192022 and 2018.2021.
  Contingent Consideration for Business Acquisitions
Balance as of December 31, 2017 $22,828
Acquisitions 212
Payments (11,974)
Remeasurement of contingent consideration for business acquisitions 381
Unrealized gain due to foreign currency translation (6)
Balance as of December 31, 2018 11,441
Payments (10,041)
Remeasurement of contingent consideration for business acquisitions (1,506)
Unrealized loss due to foreign currency translation 106
Balance as of December 31, 2019 $—

Contingent Consideration for Business Acquisitions
Balance as of December 31, 2020$1,770 
Acquisition1,800 
Change in fair value173 
Balance as of December 31, 20213,743 
Acquisition1,185 
Payment(1,379)
Change in fair value(359)
Balance as of December 31, 2022$3,190 
Financial assets and liabilities not recorded at fair value on a recurring basis are as follows:
Preferred Stock Investment
In the fourth quarter of 2019, we invested $5.0 million in Medically Home Group, Inc. (“Medically Home”), a hospital-at-home company. The investment was made in the form of preferred stock, in Medically Home Group, Inc. ("Medically Home"), a healthcare technology-enabled services company.stock. To determine the appropriate accounting treatment for our preferred stock investment, we performed a VIE analysis and concluded that Medically Home does not meet the definition of a VIE. We also reviewed the characteristics of our investment to confirm that the preferred stock is not in-substance common stock that would warrant equity method accounting. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment for our investment in Medically Home to be that of an equity security with no readily determinable fair value. We elected to apply the measurement alternative at the time of the purchase and will continue to do so until the investment does not qualify to be so measured. Under the measurement alternative, the investment is carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment in Medically Home. On a quarterly basis, we review the information available to determine whether an orderly and observable transaction for the same or similar equity instrument occurred, and remeasure to the fair value of the preferred stock using such identified transactions, with changes in the fair value recorded in our consolidated statement of operations.
During the years ended December 31, 2022 and 2020, we recognized unrealized gains of $27.0 million and $1.7 million, for cumulative unrealized gains of $28.6 million, based on observable price changes of preferred stock issued by Medically Home with similar rights and preferences to our preferred stock investment, a Level 2 input. These unrealized gains were recorded to other income (expense), net in our consolidated statement of operations. Following our purchase, there has beenThere were no impairment, nor any observable price changes toin 2021, nor have we identified any impairments of our investment.investment since inception. As of December 31, 2022 and 2021, the carrying of our preferred stock investment was $33.6 million and $6.7 million, respectively.
Senior Secured Credit Facility
The carrying value of our borrowings outstanding under our senior secured credit facility is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the senior secured credit facility bears interest at variable rates based on current market rates as set forth in the Amended Credit Agreement. Refer to Note 7 “Financing Arrangements” for additional information on our senior secured credit facility.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

Promissory Note due 2024
In the first quarter of 2022, we completed the sale of our aircraft to a third-party and used a portion of the sale proceeds to pay the remaining principal and unpaid interest on our promissory note due 2024. The carrying value of our promissory note due 2024 iswas stated at cost. OurThe carrying value approximatesapproximated fair value, using Level 2 inputs, as the promissory note bearsbore interest at rates based on currentthen-current market rates as set forth in the terms of the promissory note. Refer to Note 7 “Financing Arrangements” for additional information on our promissory note due 2024.
Convertible Notes
The carrying amountCash and estimated fair value of the Convertible Notes as of December 31, 2018 follows. The Convertible Notes matured on October 1, 2019.
 December 31, 2018
 Carrying
Amount		 Estimated
Fair Value
1.25% convertible senior notes due 2019$242,617
 $242,940

The difference between the $250 million principal amount of the Convertible NotesCash Equivalents and the carrying amount shown above represented the unamortized debt discount and issuance costs. As of December 31, 2018, the carrying value of the equity component of $39.3 million was unchanged from the date of issuance. Refer to Note 7 “Financing Arrangements” for additional information on our Convertible Notes. The estimated fair value of the Convertible Notes was determined based on the quoted bid price of the Convertible Notes in an over-the-counter market, which is a Level 2 input, on the last day of trading for the year ended December 31, 2018.Other Financial Instruments
Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values of all other financial instruments not described above reasonably approximate fair market value due to the nature of the financial instruments and the short-term maturity of these items.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

14. Other Comprehensive Income (Loss)
The table below sets forth the components of accumulated other comprehensive income (loss), net of tax for the years ended December 31, 2019, 2018,2022, 2021, and 2017.2020. 
Cash Flow Hedges(1)
Foreign
Currency
Translation		Available-for-
Sale 
Investments		Interest Rate SwapsForeign Exchange Forward ContractsTotal
Balance as of December 31, 2019$(566)$15,882 $(380)$— $14,936 
Foreign currency translation adjustment, net of tax of $0348 — — — 348 
Unrealized gain (loss) on investments:
Change in fair value, net of tax of $(499)— 1,323 — — 1,323 
Unrealized gain (loss) on cash flow hedges:
Interest rate swaps:
Change in fair value, net of tax of $1,693— — (4,652)— (4,652)
Reclassification adjustment into earnings, net of tax of $(388)— — 1,106 — 1,106 
Balance as of December 31, 2020(218)17,205 (3,926)— 13,061 
Foreign currency translation adjustment, net of tax of $0157 — — — 157 
Reclassification adjustments into earnings, net of tax of $0(2)
(1,082)(1,082)
Unrealized gain (loss) on investments:
Change in fair value, net of tax of $(385)— 1,169 — — 1,169 
Unrealized gain (loss) on cash flow hedges:
Interest rate swaps:
Change in fair value, net of tax of $(641)— — 1,606 — 1,606 
Reclassification adjustment into earnings, net of tax of $(678)— — 1,929 — 1,929 
Balance as of December 31, 2021(1,143)18,374 (391)— 16,840 
Foreign currency translation adjustment, net of tax of $0(1,890)— — — (1,890)
Unrealized gain (loss) on investments:
Change in fair value, net of tax of $2,209— (6,146)— — (6,146)
Unrealized gain (loss) on cash flow hedges:
Interest rate swaps:
Change in fair value, net of tax of $(3,555)— — 9,892 — 9,892 
Reclassification adjustment into earnings, net of tax of $176— — (489)— (489)
Foreign exchange forward contracts:
Change in fair value, net of tax of $43— — (120)(120)
Reclassification adjustment into earnings, net of tax of $(11)— — 32 32 
Balance as of December 31, 2022$(3,033)$12,228 $9,012 $(88)$18,119 
(1)    The before tax amounts reclassified from accumulated other comprehensive income related to our interest rate swaps and foreign exchange forward contracts are recorded to interest expense, net of interest income and direct costs, respectively. Refer to Note 12 "Derivative Instruments and Hedging Activity" for additional information on our derivative instruments.
(2)    In connection with the divestiture of the Life Sciences business, which included a substantially complete liquidation of an investment within a foreign entity, we included $1.1 million of accumulated translation gains in the calculation of our gain on sale recorded within other income, net on our consolidated statement of operations. See Note 3 "Acquisitions and Divestitures" for additional information on the divestiture of the Life Sciences business in 2021.
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Foreign
Currency
Translation
 
Available-for-
Sale 
Investments
 
Cash Flow
Hedges (1)
 Total
Balance as of December 31, 2016$(453) $4,088
 $(20) $3,615
Foreign currency translation adjustment, net of tax of $01,602
 —
 —
 1,602
Unrealized gain on investments:  
   
        Change in fair value, net of tax of $(998)—
 4,231
 —
 4,231
        Reclassification adjustment into retained earnings (2)
—
 493
 —
 493
Unrealized gain (loss) on cash flow hedges:       
Change in fair value, net of tax of $(106)—
 —
 366
 366
Reclassification adjustment into earnings, net of tax of $(46)—
 —
 69
 69
Reclassification adjustment into retained earnings (2)
—
 —
 (6) (6)
Balance as of December 31, 20171,149
 8,812
 409
 10,370
Foreign currency translation adjustment, net of tax of $0(1,814) —
 —
 (1,814)
Unrealized gain on investments:       
Change in fair value, net of tax of $(2,753)—
 7,772
 —
 7,772
Unrealized gain (loss) on cash flow hedges:       
Change in fair value, net of tax of $(63)—
 —
 197
 197
Reclassification adjustment into earnings, net of tax of $(10)—
 —
 (30) (30)
Balance as of December 31, 2018(665) 16,584
 576
 16,495
Foreign currency translation adjustment, net of tax of $099
 —
 —
 99
Unrealized gain (loss) on investments:       
Change in fair value, net of tax of $185—
 (702) —
 (702)
Unrealized gain (loss) on cash flow hedges:       
Change in fair value, net of tax of $295—
 —
 (819) (819)
Reclassification adjustment into earnings, net of tax of $48—
 —
 (137) (137)
Balance as of December 31, 2019$(566) $15,882
 $(380) $14,936
(1)The before tax amounts reclassified from accumulated other comprehensive income (loss) related to our cash flow hedges are recorded to interest expense, net of interest income.
(2)
Upon adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, we reclassified $0.5 million of stranded tax effects, which resulted from the enactment of the 2017 Tax Reform, from accumulated other comprehensive income to retained earnings.
HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
15. Employee Benefit and Deferred Compensation Plans
We sponsor a qualified defined contribution 401(k) plan covering substantially all of our employees. Under the plan, employees are entitled to make pretax, contributionspost-tax, and/or Roth post-tax contributions up to the annual maximums established by the Internal Revenue Service. We match an amount equal to the employees’ contributions up to 6% of the employees’ eligible earnings. Our matching contributions for the years ended December 31, 2019, 2018,2022, 2021, and 20172020 were $22.8$31.2 million, $20.8$29.9 million, and $20.0$25.1 million, respectively.
We have a non-qualified deferred compensation plan (the “Plan”) that is administered by our board of directors or a committee designated by the board of directors. Under the Plan, members of the board of directors and a select group of our employees may elect to defer the receipt of their director retainers and meeting fees or base salary and bonus, as applicable. Additionally, we may credit amounts to a participant’s deferred compensation account in accordance with employment or other agreements entered into between us and the participant. At our sole

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

discretion, we may, but are not required to, credit any additional amount we desire to any participant’s deferred compensation account. Amounts credited are subject to vesting schedules set forth in the Plan, employment agreement, or any other agreement entered into between us and the participant. The deferred compensation liability at December 31, 20192022 and 20182021 was $27.5$29.9 million and $18.4$39.1 million, respectively. This deferred compensation liability is fully funded by the Plan assets.
16. Equity Incentive Plans
In 2012, Huron adopted the 2012 Omnibus Incentive Plan (the “2012 Plan”)which replaced, on a prospective basis, our 2004 Omnibus Stock Plan (the "2004 Plan") such that future grants will be granted under the 2012 Plan and any outstanding awards granted under the 2004 Plan that are cancelled, expired, forfeited, settled in cash, or otherwise terminated without a delivery of shares to the participant will not become available for grant under the 2012 Plan. The 2012 Plan permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and other share-based or cash-based awards valued in whole or in part by reference to, or otherwise based on, our common stock. Subsequent to the initial approval of the 2012 Plan and through December 31, 2019,2022, our shareholders approved amendments to the 2012 Plan to increase the number of shares reservedauthorized for issuance by 2,254,000,to 4.6 million, in the aggregate. As of December 31, 2019, approximately 1.12022, 0.6 million shares remain available for issuance under the 2012 Plan.
On May 1, 2015, we adopted the Stock Ownership Participation Program (the “SOPP”), which is available to Huron employees below the managing director level who do not receive equity-based awards as part of their normal compensation plan. Under the SOPP, eligible employees may elect to use after-tax payroll deductions or cash contributions, to purchase shares of the Company’s common stock on certain designated purchase dates. Employees who purchase stock under the SOPP are granted restricted stock equal to 25% of their purchased shares. Vesting of the restricted stock is subject to both a time-based vesting schedule and a requirement that the purchased shares be held for a specified period. TheSubsequent to the initial approval of the SOPP and through December 31, 2022, our shareholders approved amendments to the SOPP to increase the total number of shares availableauthorized for issuance underto 0.7 million, in the SOPP was 300,000.aggregate. Prior to the adoption of the SOPP, the matching share grants and the employee purchased shares under the stock ownership participation program were governed by the 2012 Plan. As of December 31, 2019, less than 0.12022, 0.2 million shares remain available for issuance under the SOPP.
It has been our practice to issue shares of common stock upon exercise of stock options and granting of restricted stock from authorized but unissued shares, with the exception of the SOPP under which shares are issued from treasury stock. Certain grants of restricted stock under the 2012 Plan may be issued from treasury stock at the direction of the Compensation Committee.
Share-based awards outstanding under our 2012 Plan and our 2004 Plan provide for a retirement eligibility provision, under which eligible employees who have reached 62 years of age and have completed seven years of employment with Huron will continue vesting in their share-based awards after retirement, subject to certain conditions. This retirement eligibility provision also applies to future awards granted to eligible employees under the 2012 Plan. The Compensation Committee of the board of directors has the responsibility of interpreting the 2012 Plan and SOPP and determining all of the terms and conditions of awards made under the plans, including when the awards will become exercisable or otherwise vest.
Total share-based compensation cost recognized for the years ended December 31, 2019, 2018,2022, 2021, and 20172020 was $24.2$31.0 million, $18.8$25.9 million, and $14.8$23.9 million, respectively, with related income tax benefits of $5.3$6.8 million, $4.66.3 million, and $5.8$5.4 million, respectively. As of December 31, 2019,2022, there was $26.2$37.0 million of total unrecognized compensation cost related to nonvested share-based awards. This cost is expected to be recognized over a weighted average period of 2.22.3 years.
Restricted Stock Awards
The grant date fair values of our restricted stock awards are measured based on the fair value of our common stock at grant date and amortized into expense over the service period. Subject to acceleration under certain conditions, the majority of our restricted stock vests annually over four years. 

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

The table below summarizes the restricted stock activity for the year ended December 31, 2019.2022.
 Number of Shares 
Weighted
Average
Grant Date
Fair Value
(in dollars)
 2012 Omnibus Incentive Plan Stock Ownership Participation Program Total 
Nonvested restricted stock at December 31, 2018747
 11
 758
 $43.08
Granted341
 12
 353
 $48.57
Vested(284) (10) (294) $46.25
Forfeited(30) (1) (31) $45.24
Nonvested restricted stock at December 31, 2019774
 12
 786
 $44.27

Number of SharesWeighted
Average
Grant Date
Fair Value
(in dollars)
2012 Omnibus Incentive PlanStock Ownership Participation ProgramTotal
Nonvested restricted stock at December 31, 2021868 14 882 $53.51 
Granted565 19 584 $49.69 
Vested(343)(12)(355)$50.96 
Forfeited(119)(3)(122)$50.97 
Nonvested restricted stock at December 31, 2022971 18 989 $52.40 
The aggregate fair value of restricted stock that vested during the years ended December 31, 2019, 2018,2022, 2021, and 20172020 was $14.5$18.4 million, $9.1$19.8 million, and $11.1$18.6 million, respectively. The weighted average grant date fair value per share of restricted stock granted during 20182021 and 20172020 was $38.45$53.84 and $42.11,$58.13, respectively.
Performance-based Share Awards
During 2019, 2018, and 2017, the Company granted performance-based stock awards to our named executive officers and certain managing directors. The total number of shares earned by recipients of theseperformance-based share awards is contingent upon meeting practice specific and Company-widecompany-wide performance goals. Following the performance period, certain awards are subject to the completion of a service period, which is generally an additional two years. These earned awards vest on a graded vesting schedule over the service period. For certain performance awards, the recipients may earn additional shares of stock for performance achieved above the stated target. The grant date fair values of our performance-based share awards are measured based on the fair value of our common stock at grant date. Compensation cost is amortized into expense over the service period, including the performance period.
The table below summarizes the performance-based stock activity for the year ended December 31, 2019.2022. All nonvested performance-based stock outstanding at December 31, 20192022 and 20182021 was granted under the 2012 Omnibus Incentive Plan.
Number of
Shares		Weighted
Average
Grant Date
Fair Value
(in dollars)
Number of
Shares
 
Weighted
Average
Grant Date
Fair Value
(in dollars)
Nonvested performance-based stock at December 31, 2018436
 $36.81
Nonvested performance-based stock at December 31, 2021Nonvested performance-based stock at December 31, 2021438 $53.08 
Granted (1)
281
 $47.93
Granted (1)
340 $48.22 
Vested(73) $40.69
Vested(118)$49.89 
Forfeited (2)
(144) $36.06
Forfeited (2)
(182)$51.97 
Nonvested performance-based stock at December 31, 2019 (3)
500
 $42.72
Nonvested performance-based stock at December 31, 2022 (3)
Nonvested performance-based stock at December 31, 2022 (3)
478 $50.36 
(1)Shares granted in 2019 are presented at the stated target, which represents the base number of shares that could be earned. Actual shares earned may be below or, for certain grants, above the target based on the achievement of specific financial goals.
(2)Forfeited shares include shares forfeited as a result of not meeting the performance criteria of the award as well as shares forfeited upon termination.
(3)Of the 500,000 nonvested performance-based shares outstanding as of December 31, 2019, 403,794 shares were unearned and subject to achievement of specific financial goals. Once earned, the awards will be subject to time-based vesting according to the terms of the award. Based on 2019 financial results, approximately 110,936 of the 403,794 unearned shares will be forfeited in the first quarter of 2020.
(1)Shares granted in 2022 are presented at the stated target, which represents the base number of shares that could be earned. Actual shares earned may be below or, for certain grants, above the target based on the achievement of specific financial goals.
(2)Forfeited shares include shares forfeited as a result of not meeting the performance criteria of the award as well as shares forfeited upon termination.
(3)Of the 478,000 nonvested performance-based shares outstanding as of December 31, 2022, 426,847 shares were unearned and subject to achievement of specific financial goals. Once earned, the awards will be subject to time-based vesting according to the terms of the award. Based on 2022 financial results, approximately 96,142 of the 426,847 unearned shares will be forfeited in the first quarter of 2023.
The aggregate fair value of performance-based stock that vested during the years ended December 31, 2019, 2018,2022, 2021, and 20172020 was $3.4$5.8 million, $1.59.8 million, and $3.6$5.9 million, respectively. The weighted average grant date fair value per share of performance-based stock granted during 20182021 and 20172020 was $35.25$53.75 and $42.75,$58.84, respectively.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

Performance-based Stock Options
Prior to 2014,During 2022, the Company granted performance-based stock optionoptions which are earned by the recipients contingent upon meeting practice specific goals. Following the performance period, these awards are subject to the completion of a service period of an additional two years. These earned awards vest on a graded vesting schedule over the service period. For certain named executive officers. NaNperformance-based stock option awardsoptions, the recipients may earn additional options for performance achieved above the stated target. The performance-based stock options were granted in 2019, 2018, or 2017. Theat exercise prices of stock options are equal to the fair value of a share ofthe Company’s common stock on the date of grant. Subject to acceleration under certain conditions, our stock options vest annuallyCompensation cost is amortized into expense over four years. Allthe service period, including the performance period. Our performance-based stock options have a 10-year contractual term of 7 years.
The fair values of the performance-based stock options granted during 2022 were calculated using the Black-Scholes option pricing model using the following assumptions:
2022
Black-Scholes performance-based option pricing model:
Expected dividend yield—%
Expected volatility40.0%
Risk-free rate1.6% / 2.6%
Expected option life (in years)4.5 years
Expected volatility was based on our historical stock prices as we believe that our historical volatility provides the most reliable indication of future volatility and sufficient historical daily stock price observations are available. The risk-free interest rate was based on the rate of U.S. Treasury bills with an equivalent expected term of the stock options at the time of the option grant. The expected option life was estimated using the simplified method, which is a weighted average of the vesting term and the contractual term, to determine the expected term.The simplified method was used due to the lack of sufficient data available to provide a reasonable basis upon which to estimate the expected term.
StockPerformance-based stock option activity for the year ended December 31, 20192022 was as follows:
Number
of
Performance-based Options
(in thousands)		Weighted
Average
Exercise
Price
(in dollars)		Weighted
Average
Remaining
Contractual
Term
(in years)		Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 31, 2021— 
Granted (2)
183 $48.19 
Exercised— 
Forfeited or expired(12)$48.22 
Outstanding at December 31, 2022 (1)(3)
171 $48.19 6.2$4.2 
Exercisable at December 31, 2022— 
 
Number
of
Options
(in thousands)
 
Weighted
Average
Exercise
Price
(in dollars)
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 31, 2018154
 $30.52
 2.5 $3.2
Granted—
      
Exercised(48) $25.97
   $1.6
Forfeited or expired—
      
Outstanding at December 31, 2019 (1)
106
 $32.57
 1.9 $3.8
Exercisable at December 31, 2019106
 $32.57
 1.9 $3.8
(1)All of the outstanding performance-based stock options were granted under the 2012 Omnibus Incentive Plan.
(1)Of the 106,000 outstanding options, approximately 74,000 were granted under the 2004 Omnibus Stock Plan, and the remaining 32,000 options were granted under the 2012 Omnibus Incentive Plan.
The aggregate intrinsic value(2)Performance-based stock options granted in 2022 are presented at the stated target, which represents the base number of options exercised during 2018 was $0.8 million.NaNthat could be earned. Actual options were exercised in 2017.
17. Income Taxes
On December 22, 2017,earned may be below or, for certain grants, above the President of the United States signed into law the Tax Cuts and Jobs Act (“2017 Tax Reform”), a tax reform bill which, among other items, reduced the corporate federal income tax rate from 35% to 21% and moved from a worldwide tax system to a territorial system. As a result of the enactment of this legislation during the fourth quarter of 2017, we estimated the remeasurement of our net deferred taxestarget based on the new lower tax rate,achievement of specific financial goals.
(3)All of the outstanding performance-based stock options as well as provided for additional one-time income tax expense estimates primarily relatedof December 31, 2022 were unearned and subject to achievement of specific financial goals. Once earned, the options will be subject to time-based vesting according to the transition taxterms of the award. Based on accumulated foreign earnings2022 financial results, approximately 47,835 of the 171,000 unearned options will be forfeited in the first quarter of 2023.
The weighted average grant date fair value of stock options granted during 2022 was $17.00. No performance-based stock options were granted or exercised in 2021 and elimination of foreign tax credits for dividends2020.
Time-vested Stock Options
In prior years, we have granted stock options to certain employees that are subject to the 100 percent exemption in our consolidated financial statements as of and for the year ended December 31, 2017. In 2017 and the first nine months of 2018, we recorded provisional amounts for certain enactment-date effects of 2017 Tax Reform by applying the guidance in Staff Accounting Bulletin (“SAB”) No. 118 because we had not yet completed our enactment-date accounting for these effects.
During the fourth quarter of 2018, we completed our accounting for all of the enactment-date income tax effects of 2017 Tax Reform. For the year ended December 31, 2018, we recorded tax expense of $2.2 million related to establishing a valuation allowance for foreign tax credits, a tax benefit of $0.6 million related to the U.S. federal return to provision adjustments for the remeasurement of our net deferred taxessolely earned based on the new lower rate and tax expensecompletion of $0.2 million relatedthe stated service period. These time-vested stock options were granted at exercise prices equal to withholding taxthe fair value of the Company’s common stock on outside basis differences due to our change in assertion for permanent reinvestment. These amounts are recorded as a component of income tax expense from continuing operations.
2017 Tax Reform subjects a US shareholder to tax on Global Intangible Low-Taxed Income (GILTI) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred. We have elected to recognize the tax on GILTI as a period expense in the period the tax is incurred.

date
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

of grant. No time-vested stock option awards were granted in 2022 or 2020. Subject to acceleration under certain conditions, these time-vested stock options vest annually over four years. Our time-vested stock options have a contractual term between 7 and 10 years.
The fair value of the time-vested stock options granted during 2021 were calculated using the Black-Scholes option pricing model using the following assumptions:
2021
Black-Scholes time-vested option pricing model:
Expected dividend yield—%
Expected volatility40.0%
Risk-free rate0.9%
Expected option life (in years)4.75 years
Expected volatility was based on our historical stock prices as we believe that our historical volatility provides the most reliable indication of future volatility and sufficient historical daily stock price observations are available. The risk-free interest rate was based on the rate of U.S. Treasury bills with an equivalent expected term of the stock options at the time of the option grant. The expected option life was estimated using the simplified method, which is a weighted average of the vesting term and the contractual term, to determine the expected term. The simplified method was used due to the lack of sufficient data available to provide a reasonable basis upon which to estimate the expected term.
Time-vested stock option activity for the year ended December 31, 2022 was as follows:
Number
of
Time-vested Options
(in thousands)		Weighted
Average
Exercise
Price
(in dollars)		Weighted
Average
Remaining
Contractual
Term
(in years)		Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 31, 202193 $46.25 4.1$0.3 
Granted— 
Exercised(37)$38.89 $0.5 
Forfeited or expired— 
Outstanding at December 31, 2022 (1)
56 $51.05 5.2$1.2 
Exercisable at December 31, 202219 $48.15 3.9$0.5 
(1)All of the outstanding time-vested stock options were granted under the 2012 Omnibus Incentive Plan.
The weighted average grant date fair value of the time-vested stock options granted during 2021 was $18.42. No time-vested stock options were granted in 2022 and 2020. The aggregate intrinsic value of time-vested stock options exercised during 2021 and 2020 was $0.4 million and $1.1 million, respectively.
17. Income Taxes
In March 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law, which is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other items, includes income tax provisions relating to net operating loss carryback period, options to defer payroll tax payments for a limited period and technical corrections to tax depreciation methods for qualified improvement property. As a result of the CARES Act, we recognized a $1.5 million tax benefit related to the remeasurement of a portion of our income tax receivable for the federal net operating losses incurred in 2018 and 2020 that were carried back to prior year income, both for a refund at the higher, prior year tax rate. As a result of electing the retroactive Global Intangible Low-Taxed Income (“GILTI”) high-tax exclusion in the second quarter of 2021, we recognized a $1.0 million tax benefit of which $0.4 million related to carrying back our increased 2018 federal net operating loss to prior year income for a refund at the higher, prior year tax rate. During the third quarter of 2021, we recognized an additional tax benefit of $2.0 million, primarily related to the U.S. federal return to provision adjustments for carrying back our increased 2020 federal net operating loss to prior year income for a refund at the higher, prior year tax rate. During 2020, we deferred $12.2 million of payroll tax payments, which was all repaid in the third quarter of 2021.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
The income tax expense for continuing operations for the years ended December 31, 2019, 2018,2022, 2021, and 2017 consists2020 consisted of the following: 
 Year Ended December 31,
 2019 2018 2017
Current:     
Federal$125
 $(1,611) $(635)
State2,014
 286
 545
Foreign(422) 1,885
 2,040
Total current1,717
 560
 1,950
Deferred:     
Federal7,467
 9,742
 (46,103)
State1,610
 2,008
 (6,576)
Foreign(282) (1,033) (1,270)
Total deferred8,795
 10,717
 (53,949)
Income tax expense for continuing operations$10,512
 $11,277
 $(51,999)

 Year Ended December 31,
 202220212020
Current:
Federal$7,130 $(934)$(2,480)
State2,987 1,974 168 
Foreign4,123 3,529 2,016 
Total current14,240 4,569 (296)
Deferred:
Federal14,645 10,951 (7,414)
State4,039 2,372 (2,025)
Foreign101 (843)(420)
Total deferred18,785 12,480 (9,859)
Income tax expense for continuing operations$33,025 $17,049 $(10,155)
The components of income from continuing operations before taxes were as follows: 
 Year Ended December 31,
 202220212020
U.S.$90,907 $70,963 $(35,054)
Foreign17,670 9,073 1,181 
Total$108,577 $80,036 $(33,873)
 Year Ended December 31,
 2019 2018 2017
U.S.$53,898
 $17,025
 $(221,137)
Foreign(1,407) 8,196
 (1,367)
Total$52,491
 $25,221
 $(222,504)
A reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations is as follows: 
 Year Ended December 31,
 2019 2018 2017
Percent of pretax income from continuing operations:     
At U.S. statutory tax rate21.0 % 21.0 % 35.0 %
State income taxes, net of federal benefit6.1
 7.2
 2.7
Disallowed executive compensation2.0
 2.5
 —
Meals and entertainment1.6
 2.0
 (0.3)
Tax credits(3.1) (1.4) 0.2
Valuation allowance(2.9) 6.9
 (0.2)
Realized investment (gains) losses(1.8) 1.3
 0.4
Net tax benefit related to “check-the-box” election(1.4) —
 1.2
Stock-based compensation(1.1) 4.9
 (0.8)
Foreign source income(0.5) (1.7) 0.1
Change in fair value of contingent consideration liabilities—
 2.4
 —
Global intangible low-taxed income —
 2.1
 —
Transition tax on accumulated foreign earnings, net of credits—
 0.8
 (0.3)
U.S. federal rate change—
 (2.3) (3.4)
Goodwill impairment charges—
 —
 (10.2)
Other0.1
 (1.0) (1.0)
Effective income tax rate for continuing operations20.0 % 44.7 % 23.4 %

The effective tax rate for discontinued operations in 2019 was 26.0%, based on a tax benefit of $0.1 million and pretax loss from discontinued operations of $0.3 million, and was higher than the statutory tax rate primarily due to state income taxes. The effective tax rate for discontinued operations in 2018 was 26.7%, based on tax expense of $0.1 million and a pretax loss from discontinued operations of $0.4 million, and was higher than the statutory tax rate primarily due to state income taxes.The effective tax rate for discontinued operations in

 Year Ended December 31,
 202220212020
Percent of pretax income from continuing operations:
At U.S. statutory tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit6.1 5.2 4.4 
Valuation allowance2.6 1.1 (3.1)
Disallowed executive compensation1.9 1.2 (2.8)
Realized investment gains/losses1.4 (1.1)2.6 
Foreign source income1.2 (0.2)0.5 
Meals and entertainment0.1 0.1 (0.6)
Stock-based compensation0.1 (0.7)4.3 
Deferred tax adjustments(2.7)(0.2)1.7 
Tax credits(1.0)(1.3)3.0 
CARES Act net operating loss carryback— (3.8)4.4 
Goodwill impairment charges— — (2.6)
Unrecognized tax benefits— — (2.0)
Other(0.3)— (0.8)
Effective income tax rate for continuing operations30.4 %21.3 %30.0 %
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

2017 was 60.0%, based on tax expense of $0.6 million and a pretax income from discontinued operations of $1.0 million, and was higher than the statutory tax rate primarily due the settlement of foreign tax audits.
The net deferred tax liabilities for continuing operationsasset (liability) balance at December 31, 20192022 and 20182021 consisted of the following: 
As of December 31, As of December 31,
2019 2018 20222021
Deferred tax assets:   Deferred tax assets:
Operating lease liabilities$20,541
 $—
Operating lease liabilities$15,249 $17,542 
Accrued payroll and other liabilities12,289
 6,737
Share-based compensation6,970
 6,150
Share-based compensation9,314 8,062 
Deferred compensation liabilityDeferred compensation liability7,963 10,331 
Accrued payroll and payroll related liabilitiesAccrued payroll and payroll related liabilities6,432 5,645 
Net operating loss carryforwardsNet operating loss carryforwards3,304 1,243 
Tax credits465
 3,548
Tax credits1,813 1,828 
Net operating loss carryforwards280
 2,247
Deferred lease incentives—
 4,100
Restructuring charge liability—
 639
Other1,451
 1,466
Other2,012 2,009 
Total deferred tax assets41,996
 24,887
Total deferred tax assets46,087 46,660 
Valuation allowance(1,016) (3,143)Valuation allowance(5,667)(2,876)
Net deferred tax assets40,980
 21,744
Net deferred tax assets40,420 43,784 
Deferred tax liabilities:   Deferred tax liabilities:
Intangibles and goodwill(16,421) (6,665)Intangibles and goodwill(35,588)(24,375)
Operating lease right-of-use assets(14,675) —
Operating lease right-of-use assets(8,354)(9,837)
Preferred stock investmentPreferred stock investment(7,613)(441)
Convertible debt investment(5,608) (5,934)Convertible debt investment(4,421)(6,604)
Software development costs(4,496) (1,655)Software development costs(4,195)(6,071)
Property and equipment(4,039) (3,604)Property and equipment(3,021)(2,730)
Prepaid expenses(2,183) (1,794)Prepaid expenses(2,220)(2,137)
Other(483) (671)Other(5,600)(2,058)
Total deferred tax liabilities(47,905) (20,323)Total deferred tax liabilities(71,012)(54,253)
Net deferred tax asset (liability) for continuing operations$(6,925) $1,421
Net deferred tax liabilitiesNet deferred tax liabilities$(30,592)$(10,469)
As of December 31, 20192022 and 2018,2021, we had valuation allowances of $1.0$5.7 million and $3.1$2.9 million, respectively, primarily due to uncertainties relating to the ability to realize deferred tax assets recorded for foreign losses and tax credits. The decreaseincrease in valuation allowances in 20192022 primarily related to a decreasean increase in the valuation allowance for foreign tax credits.losses.
We have federalforeign net operating losses of $3.2 million which begin to expire in 2027 and state tax creditnet operating loss carryforwards of $0.5$0.1 million which will begin to expire in 2020,2040, if not utilized. We also have foreign net operating lossesfederal tax credit carryforwards of $0.3$1.8 million which carryforward indefinitely. We have no federal or state net operating loss carryforwards as of December 31, 2019.will begin to expire in 2030, if not utilized.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

A reconciliation of our beginning and ending amount of unrecognized tax benefits is as follows: 
Unrecognized Tax Benefits
Balance at January 1, 2020$50 
Additions based on tax positions related to prior years694 
Balance at December 31, 2020744 
Balance at December 31, 2021744 
Decrease due to laps of statue of limitations(101)
Decrease based on tax positions related to prior years(50)
Balance at December 31, 2022$593 
As December 31, 2022 and 2021, we had $0.6 million and $0.7 million of unrecognized tax benefits, respectively, which would affect the effective tax rate of continuing operations if recognized. It is reasonably possible that approximately $0.6 million of the liability for
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

A reconciliation of our beginning and ending amount of unrecognized tax benefits is as follows: 
  Unrecognized Tax Benefits
Balance at January 1, 2017 $3,340
Decrease due to lapse of statute of limitations (2,410)
Decrease based on tax positions related to prior years (117)
Balance at December 31, 2017 813
Additions based on tax positions related to prior years 115
Decrease due to lapse of statute of limitations (28)
Balance at December 31, 2018 900
Decrease due to settlements of prior year tax positions (115)
Decrease due to lapse of statute of limitations (735)
Balance at December 31, 2019 $50

at December 31, 2022 could decrease in the next twelve months primarily due to the expiration of statutes of limitations.
As of both December 31, 2019,2022 and 2021, we had $0.1 million of unrecognized tax benefits which would affect the effective tax rate of continuing operations if recognized.
As of December 31, 2019 and 2018, we had less than $0.1 million and $0.1 million accrued for the potential payment of interest and penalties. Accrued interest and penalties are recorded as a component of provision for income taxes on our consolidated statement of operations.
We file income tax returns with federal, state, local and foreign jurisdictions. Tax years 20162019 through 20182021 are subject to future examinations by federal tax authorities. Tax years 20132016 through 20182021 are subject to future examinations by state and local tax authorities. Our foreign income tax filings are subject to future examinations by the local foreign tax authorities for tax years 20142017 through 2018.2021. Currently, we are not under audit by any tax authority.
18. Commitments, Contingencies and Guarantees
Lease Commitments
We lease office space, data centers and certain equipment under non-cancelable operating lease arrangements expiring on various dates through 2029, with various renewal options. Office facilities under operating leases include fixed payments plus, in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of real estate taxes, insurance and operating expenses. See Note 5 "Leases"“Leases” for additional information on our leases, including the remaining expected lease payments under our operating leases as of December 31, 2019.2022.
Litigation
DuringOaktree
On November 9, 2018, Huron Consulting Services LLC, a wholly owned subsidiary of Huron, was engaged by Oaktree Medical Centre LLC, a management services organization (“Oaktree”), to perform interim management and financial advisory services. As part of the year ended December 31,services, a Huron employee was appointed by Oaktree’s board of directors to serve as Chief Restructuring Officer of Oaktree (the “CRO”). The engagement letter through which Oaktree retained Huron’s services (the “Engagement Letter”) states that all disputes or claims arising thereunder are subject to binding arbitration, disclaims special, consequential, incidental and exemplary damages and losses and caps liability to the fees paid for the portion of the engagement giving rise to any liability. On September 19, 2019, we recordedOaktree and certain of its affiliates filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of North Carolina, with the cases subsequently transferred to the District of South Carolina. As a $0.4 million litigation loss accrualresult of the bankruptcy filing, a Chapter 7 trustee was appointed to oversee the bankruptcy estates, at which time Huron’s services for Oaktree concluded.
In April 2021, Trustee’s counsel communicated in writing to Huron its intent to pursue various claims against Huron and the CRO, among others, on behalf of the bankruptcy estates related to a legal claim that was subsequently settledthe services carried out by Huron and the CRO during the first quarterengagement.
On September 17, 2021, the Trustee filed a complaint in the Bankruptcy Court for the District of 2020. DuringSouth Carolina against Huron and the year endedCRO, among others (the “Complaint”), alleging breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, negligence, violations of the South Carolina Unfair Trade Practices Act, fraud, civil conspiracy, unjust enrichment, and recovery of avoided transfers under sections 547, 548 and 550 of the Bankruptcy Code. On December 31, 2018,7, 2021, the Trustee filed an amended version of the Complaint (the “Amended Complaint”), generally alleging the same claims asserted in the initial Complaint but (i) removing the claim for a violation of the South Carolina Unfair Trade Practices Act and (ii) adding a claim for breach of contract.
In the Amended Complaint, the Trustee asserted that Huron and the CRO, among others, did not develop and implement a Chapter 11 restructuring plan on a timely basis and that their failure to do so led to significant damages. The Trustee sought an unspecified amount of monetary damages in the Amended Complaint. We believe the Trustee’s allegations with respect to Huron and the CRO are without merit. On December 21, 2021, we filed a motion to dismiss all of the claims in the Amended Complaint. On April 19, 2022, the bankruptcy court entered an order staying all of the Trustee’s claims against Huron and the CRO after (i) finding that the state law claims were subject to arbitration and (ii) exercising its discretion to stay the non-state-law claims pending the arbitration proceeding. The Trustee did not appeal the court’s order prior to the deadline of May 3, 2022. In October 2022, Huron, the CRO and the Trustee reached agreement on a settlement agreement relatedwhich provides for the Trustee’s dismissal of the Amended Complaint with prejudice as it relates to Huron's claimHuron and the CRO and a mutual release of claims in exchange for a class action lawsuit, resultingsettlement payment to the Trustee of $1.5 million. As a result, we increased our accrued liability and insurance receivable to $1.5 million as of September 30, 2022, which had a net zero impact in a gain of $2.5 million. These items are recorded in litigation and other losses (gains), net on our consolidated statement of operations. In the fourth quarter of 2022, the settlement agreement was approved by the Bankruptcy Court and the settlement payment was made to the Trustee. Thereafter, the case was dismissed with prejudice as it relates to Huron and the CRO.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, we are not a party to any litigation or legal proceeding or subject to any claim that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results.
Guarantees
Guarantees in the form of letters of credit totaling $1.7 million and $1.6$0.7 million were outstanding at both December 31, 20192022 and 2018, respectively, primarily2021 to support certain office lease obligations.
In connection with certain business acquisitions, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreements. As of December 31, 2019,2022 and 2021, the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

total estimated fair value of our outstanding contingent consideration liability was zero. As of December 31, 2018, the total estimated fair value of our contingent consideration liabilities was $11.4 million.$3.2 million and $3.7 million, respectively.
To the extent permitted by law, our bylaws and articles of incorporation require that we indemnify our officers and directors against judgments, fines and amounts paid in settlement, including attorneys’ fees, incurred in connection with civil or criminal action or proceedings, as it relates to their services to us if such person acted in good faith. Although there is no limit on the amount of indemnification, we may have recourse against our insurance carrier for certain payments made.
19. Segment Information
Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker, who is our chief executive officer, manages the business under 3three operating segments, which are our reportable segments: Healthcare, Education, and Commercial.
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. The new operating model strengthens Huron’s go-to-market strategy, drives efficiencies that support margin expansion, and positions the company to accelerate growth.
To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and Education.the Healthcare segment includes some revenue and costs historically reported in the Education segment. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. These changes improve visibility into the core drivers of our business. While our consolidated results have not been impacted, our historical segment information has been recast for consistent presentation.
•Healthcare
Our Healthcare segment hasserves acute care providers, including national and regional health systems; academic health systems; community health systems; and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our Healthcare professionals have a depth of expertise in business operations, including financial and operational improvement, care transformation, culture and revenue cycle managed services; digital solutions, spanning technology and analytic-related services and a portfolio of software products; organizational excellence,transformation; financial advisory and strategy and technologyinnovation. Healthcare organizations are focused on establishing a sustainable long-term strategy and analytics. We serve nationalbusiness model centered around growth, optimal cost structures, reimbursement models, financial strategies, and regional hospitals, integrated health systems, academic medical centers, community hospitals,consumer-focused digital transformation; changing the way care is delivered, particularly in light of personnel shortages, and medical groups.improving access to care; and evolving their digital capabilities to more effectively manage their business. Our solutions help clients evolve and adapt to thethis rapidly changing healthcare environment to become a more agile, efficient and achieveconsumer-centric organization. We use our deep industry, functional and technical expertise to help clients solve a diverse set of business issues, including, but not limited to, identifying new opportunities for growth, optimizeoptimizing financial and operational performance, enhance profitability, improve qualityimproving care delivery and clinical outcomes, align leaders, improve organizational culture, and driveincreasing physician, patient and employee engagement across the enterprise to deliver better consumer outcomes.
We help organizations transform and innovate their delivery model to focus on patient wellness by improving quality outcomes, minimizing care variation and fundamentally improving patient and population health. Our consultants collaborate with clients to help build and sustain today’s business to invest in the future by reducing complexity, improving operational efficiency and growing market share. We enable the healthcare of the future by identifying, integrating and optimizing digital and technology investments to collect data that transforms care delivery and improves patient outcomes. We also develop future leaders capable of driving meaningful cultural and organizational change and who transform the consumer experience.
Business Advisory
Our Business Advisory segment provides services to large and middle market organizations, lending institutions, law firms, investment banks, private equity firms, and not-for-profit organizations, including higher education and healthcare institutions. We assist clients in a broad range of industries and across the spectrum from healthy, well-capitalized companies to organizations in transition, as well as creditors, equity owners, and other key constituents. Our Enterprise Solutions and Analytics experts advise, deliver, and optimize technology and analytic solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client or stakeholder experience. Our Business Advisory experts resolve complex business issues and enhance client enterprise value through a suite of services including capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory. Our Strategy and Innovation professionals collaborate with clients across a range of industries to identify new growth opportunities, build new ventures and capabilities, and accelerate organizational change. Our Life Sciences professionals provide strategic solutions to help pharmaceutical, medical device, and biotechnology companies deliver more value to patients, payers, and providers, and comply with regulations.
Education
Our Education segment provides consulting and technology solutions to higher education institutions and academic medical centers. We collaborate with clients to address challenges relating to business and technology strategy, financial and operational excellence, student success, research administration, and regulatory compliance. Our research enterprise solutions assist clients in identifying and implementing institutional research strategy, optimizing clinical research operations, improving financial management and cost reimbursement, improving service to faculty, and mitigating risk compliance. Our technology strategy, enterprise applications, and analytic solutions transform and optimize operations, deliver time and cost savings, and enhance the student experience. Our institutional strategy, budgeting and financial management, and business operations align missions with business priorities, improve quality, and reduce costs institution-wide. Our student solutions improve attraction, retention and graduation rates, increase student satisfaction, and help generate quality outcomes.

maximizing return on technology investments.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

•Education
Our Education segment serves public and private colleges and universities, research institutes and other education-related organizations. Our Education professionals have a depth of expertise in strategy and innovation; business operations, including the research enterprise and student and alumni lifecycle; digital solutions, spanning technology and analytic-related services and Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance; and organizational transformation. Our Education segment clients are increasingly faced with strategic, financial and/or enrollment challenges, increased competition, and a need to modernize their businesses using technology to advance their missions. We combine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with technology and analytics; strengthening research strategies and support services; evolving their organizational strategy; optimizing financial and operational performance; applying innovative enrollment strategies; and enhancing the student lifecycle.
•Commercial
Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory change by helping them adapt to rapidly changing environments and accelerate business transformation. Our Commercial professionals work primarily with six primary buyers: the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, and organizational advisors, including lenders and law firms. We have a deep focus on serving organizations in the financial services, energy and utilities, industrials and manufacturing industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and nonprofit. Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, strategy and innovation, and financial advisory (special situation advisory and corporate finance advisory) services. In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage. Our experts help organizations across industries with a variety of business challenges, including, but not limited to, embedding technology and analytics throughout their internal and customer-facing operations; developing analytics and insights to identify the needs of tomorrow’s customers, evolve their strategies, and bring new products to market; managing through stressed and distressed situations to create a viable path forward for stakeholders; and providing financial, risk and regulatory advisory offerings.
Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue and selling, general and administrativeoperating expenses that are incurred directly by the segment. Unallocated corporate costs include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include costs for corporate office support costs, office facility costs, costs relatingrelated to accounting and finance, human resources, legal, marketing, information technology, and company-wide business development functions, as well as costs related to overall corporate management. Our chief operating decision maker does not evaluate segments using asset information.

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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
The tables below set forth information about our operating segments for the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. We do not present financial information by geographic area because the financial results of our international operations are immaterial.not significant to our consolidated financial statements.  
Year Ended December 31, Year Ended December 31,
2019 2018 2017 202220212020
Healthcare:     Healthcare:
Revenues$399,221
 $364,763
 $356,909
Revenues$534,999 $444,767 $406,536 
Operating income$125,724
 $108,060
 $118,761
Operating income$131,227 $118,324 $105,650 
Segment operating income as a percentage of segment revenues31.5% 29.6% 33.3%Segment operating income as a percentage of segment revenues24.5 %26.6 %26.0 %
Business Advisory:     
Revenues$252,508
 $236,185
 $207,753
Operating income$49,695
 $50,625
 $46,600
Segment operating income as a percentage of segment revenues19.7% 21.4% 22.4%
Education:     Education:
Revenues$225,028
 $194,177
 $167,908
Revenues$359,835 $242,374 $223,325 
Operating income$55,741
 $48,243
 $40,318
Operating income$78,924 $52,398 $45,780 
Segment operating income as a percentage of segment revenues24.8% 24.8% 24.0%Segment operating income as a percentage of segment revenues21.9 %21.6 %20.5 %
Total Company:     
Commercial:Commercial:
RevenuesRevenues$237,621 $218,499 $214,266 
Operating incomeOperating income$50,025 $34,296 $39,044 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues21.1 %15.7 %18.2 %
Total Huron:Total Huron:
Revenues$876,757
 $795,125
 $732,570
Revenues$1,132,455 $905,640 $844,127 
Reimbursable expenses88,717
 82,874
 75,175
Reimbursable expenses26,506 21,318 26,887 
Total revenues and reimbursable expenses$965,474
 $877,999
 $807,745
Total revenues and reimbursable expenses$1,158,961 $926,958 $871,014 
     
Segment operating income$231,160
 $206,928
 $205,679
Segment operating income$260,176 $205,018 $190,474 
Items not allocated at the segment level:     Items not allocated at the segment level:
Other operating expenses140,285
 122,276
 120,718
Other operating expenses140,145 131,545 135,105 
Litigation and other losses (gains), net(1,196) (2,019) 1,111
Depreciation and amortization28,365
 34,575
 38,213
Depreciation and amortization20,271 20,634 24,405 
Goodwill impairment charges (1)
—
 —
 253,093
Goodwill impairment charges (1)
— — 59,816 
Other expense, net11,215
 26,875
 15,048
Operating income (loss)Operating income (loss)99,760 52,839 (28,852)
Other income (expense), netOther income (expense), net8,817 27,197 (5,021)
Income (loss) from continuing operations before taxes$52,491
 $25,221
 $(222,504)Income (loss) from continuing operations before taxes$108,577 $80,036 $(33,873)

(1)
(1)The goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance.

The goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

  As of December 31,
Segment Assets: 2019 2018 2017
Healthcare $73,019
 $65,133
 $70,097
Business Advisory 59,315
 59,017
 58,217
Education 38,881
 26,990
 31,367
Unallocated assets (1)
 933,056
 898,392
 877,247
Total assets $1,104,271
 $1,049,532
 $1,036,928
(1)Unallocated assets include goodwill and intangible assets and our long-term investments, as management does not evaluate these items at the segment level when assessing segment performance or allocating resources. Refer to Note 4 “Goodwill and Intangible Assets" and Note 13 "Fair Value of Financial Instruments" for further information on these assets.
The following table illustrates the disaggregation of revenues by billing arrangements, employee types, and timing of revenue recognition,capability, including a reconciliation of the disaggregated revenues to revenues from our three operating segments for the yearyears ended December 31, 20192022, 2021 and 2018.2020. For the years ended December 31, 2022, 2021, and 2020, substantially all of our revenues were recognized over time.
Year Ended December 31,
Revenues by Capability202220212020
Healthcare:
Consulting and Managed Services$365,645 $327,165 $294,456 
Digital169,354 117,602 112,080 
Total revenues$534,999 $444,767 $406,536 
Education:
Consulting and Managed Services$192,336 $131,369 $108,784 
Digital167,499 111,005 114,541 
Total revenues$359,835 $242,374 $223,325 
Commercial:
Consulting and Managed Services$80,013 $97,381 $110,846 
Digital157,608 121,118 103,420 
Total revenues$237,621 $218,499 $214,266 
Total Huron:
Consulting and Managed Services$637,994 $555,915 $514,086 
Digital494,461 349,725 330,041 
Total revenues$1,132,455 $905,640 $844,127 
 Year Ended December 31, 2019
 Healthcare Business Advisory Education Total
Billing Arrangements       
Fixed-fee$249,479
 $100,635
 $51,826
 $401,940
Time and expense55,204
 139,610
 154,893
 349,707
Performance-based71,051
 6,856
 —
 77,907
Software support, maintenance and subscriptions23,487
 5,407
 18,309
 47,203
Total$399,221
 $252,508
 $225,028
 $876,757
        
Employee Type (1)
       
Revenue generated by full-time billable consultants$280,915
 $243,350
 $195,844
 $720,109
Revenue generated by full-time equivalents118,306
 9,158
 29,184
 156,648
Total$399,221
 $252,508
 $225,028
 $876,757
        
Timing of Revenue Recognition       
Revenue recognized over time$390,884
 $252,508
 $223,673
 $867,065
Revenue recognized at a point in time8,337
 —
 1,355
 9,692
Total$399,221
 $252,508
 $225,028
 $876,757

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

 Year Ended December 31, 2018
 Healthcare Business Advisory Education Total
Billing Arrangements       
Fixed-fee$239,263
 $98,119
 $39,586
 $376,968
Time and expense58,377
 128,583
 140,824
 327,784
Performance-based42,684
 5,405
 —
 48,089
Software support, maintenance and subscriptions24,439
 4,078
 13,767
 42,284
Total$364,763
 $236,185
 $194,177
 $795,125
        
Employee Type (1)
       
Revenue generated by full-time billable consultants$247,416
 $225,335
 $170,496
 $643,247
Revenue generated by full-time equivalents117,347
 10,850
 23,681
 151,878
Total$364,763
 $236,185
 $194,177
 $795,125
        
Timing of Revenue Recognition       
Revenue recognized over time$356,826
 $236,185
 $190,526
 $783,537
Revenue recognized at a point in time7,937
 —
 3,651
 11,588
Total$364,763
 $236,185
 $194,177
 $795,125
(1)Full-time billable consultants consist of our full-time professionals who provide consulting services to our clients and are billable to our clients based on the number of hours worked. Full-time equivalent professionals consist of our coaches and their support staff within our Culture and Organizational Excellence solution, consultants who work variable schedules as needed by our clients, employees who provide managed services in our Healthcare segment, and full-time employees who provide software support and maintenance services to our clients.
For the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, substantially all of our revenues and long-lived assets were attributed to or located in the United States.
At December 31, 20192022 and 2018,2021, no single client accounted for greater than 10% of our combined balance of receivables from clients, net and unbilled services, balances.net. During the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, no single client generated greater than 10% of our consolidated revenues.
20. Valuation and Qualifying Accounts
The table below sets forth the changes in the carrying amount of our allowances for doubtful accounts and unbilled services and valuation allowance for deferred tax assets for the years ended December 31, 2019, 2018,2022, 2021, and 2017.
2020. Allowances for doubtful accounts and unbilled services includes allowances for fee adjustments and other discretionary pricing adjustments as well as allowances related to clients' inability to make required payments on accounts receivable.
 
Beginning
balance
 
Additions (1)
 Deductions 
Ending
balance
Year ended December 31, 2017:       
Allowances for doubtful accounts and unbilled services$21,259
 43,888
 40,648
 $24,499
Valuation allowance for deferred tax assets$626
 793
 172
 $1,247
Year ended December 31, 2018:       
Allowances for doubtful accounts and unbilled services$24,499
 49,390
 51,648
 $22,241
Valuation allowance for deferred tax assets$1,247
 2,314
 418
 $3,143
Year ended December 31, 2019:       
Allowances for doubtful accounts and unbilled services$22,241
 69,979
 73,552
 $18,668
Valuation allowance for deferred tax assets$3,143
 1
 2,128
 $1,016
(1)Additions to allowances for doubtful accounts and unbilled services are charged to revenues to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client’s inability to make required payments on accounts receivables, the provision is charged to operating expenses. Additions also include allowances acquired in business acquisitions, which were not material in any period presented.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)

Beginning
Balance
Additions (1)
DeductionsEnding
Balance
Year ended December 31, 2020:
Allowances for doubtful accounts and unbilled services$18,668 63,268 60,630 $21,306 
Valuation allowance for deferred tax assets$1,016 1,160 64 $2,112 
Year ended December 31, 2021:
Allowances for doubtful accounts and unbilled services$21,306 9,852 15,363 $15,795 
Valuation allowance for deferred tax assets$2,112 1,090 326 $2,876 
Year ended December 31, 2022:
Allowances for doubtful accounts and unbilled services$15,795 17,820 11,480 $22,135 
Valuation allowance for deferred tax assets$2,876 3,421 630 $5,667 
21. Selected Quarterly Financial Data (Unaudited)(1)
 Quarter Ended
2019Mar. 31 Jun. 30 Sep. 30 Dec. 31
Revenues$204,445
 $220,754
 $219,289
 $232,269
Reimbursable expenses18,617
 23,534
 23,636
 22,930
Total revenues and reimbursable expenses223,062
 244,288
 242,925
 255,199
Gross profit65,496
 77,832
 75,158
 77,315
Operating income6,756
 17,875
 20,576
 18,499
Net income from continuing operations3,350
 10,569
 13,706
 14,354
Loss from discontinued operations, net of tax(46) (97) (52) (41)
Net income3,304
 10,472
 13,654
 14,313
Net earnings per basic share:       
Net income from continuing operations$0.15
 $0.48
 $0.62
 $0.65
Loss from discontinued operations, net of tax—
 —
 —
 —
Net income$0.15
 $0.48
 $0.62
 $0.65
Net earnings per diluted share:       
Net income from continuing operations$0.15
 $0.47
 $0.61
 $0.63
Loss from discontinued operations, net of tax—
 —
 —
 —
Net income$0.15
 $0.47
 $0.61
 $0.63
Weighted average shares used in calculating earnings per share:       
Basic21,868
 21,997
 22,052
 22,051
Diluted22,311
 22,400
 22,561
 22,676

Additions to allowances for doubtful accounts and unbilled services are charged to revenues. To the extent we write-off accounts receivable due to a client’s inability to pay, the charge is recognized as a component of selling, general and administrative expenses.
 Quarter Ended
2018Mar. 31 Jun. 30 Sep. 30 Dec. 31
Revenues$193,679
 $197,544
 $198,448
 $205,454
Reimbursable expenses17,619
 20,733
 21,296
 23,226
Total revenues and reimbursable expenses211,298
 218,277
 219,744
 228,680
Gross profit59,745
 68,820
 68,893
 71,834
Operating income2,322
 19,138
 13,561
 17,075
Net income (loss) from continuing operations(3,222) 5,862
 8,249
 3,055
Income (loss) from discontinued operations, net of tax(42) (490) 228
 6
Net income (loss)(3,264) 5,372
 8,477
 3,061
Net earnings (loss) per basic share:       
Net income (loss) from continuing operations$(0.15) $0.27
 $0.38
 $0.14
Income (loss) from discontinued operations, net of tax—
 (0.02) 0.01
 —
Net income (loss)$(0.15) $0.25
 $0.39
 $0.14
Net earnings (loss) per diluted share:       
Net income (loss) from continuing operations$(0.15) $0.27
 $0.37
 $0.14
Income (loss) from discontinued operations, net of tax—
 (0.02) 0.01
 —
Net income (loss)$(0.15) $0.25
 $0.38
 $0.14
Weighted average shares used in calculating earnings per share:       
Basic21,592
 21,709
 21,745
 21,774
Diluted21,592
 21,918
 22,110
 22,294


F-45F-42