Huron is a global ~~professional services firm committed to achieving sustainable results in partnership with its clients. We bring a depth of expertise in strategy, technology, operations, advisory services~~consultancy that helps clients drive growth, enhance performance and ~~analytics to drive lasting and measurable results~~sustain leadership in the ~~healthcare, higher education, life sciences~~markets they serve. We partner with clients to develop strategies and ~~commercial sectors. Through focus, passion, and collaboration, we provide guidance~~implement solutions that enable the transformative change our clients need to ~~support organizations as they contend with the changes transforming~~own their ~~industries and businesses.~~future.

The accompanying unaudited consolidated financial statements reflect the financial position, results of operations, and cash flows as of and for the three and nine months ended September 30, ~~2017~~2019 and ~~2016.~~2018. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ~~(“SEC”~~("SEC") for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ~~(“GAAP”~~("GAAP") for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair statement of our financial position, results of operations, and cash flows for the interim periods presented in conformity with GAAP. These financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, ~~2016~~2018 included in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q for the periods ended March 31, ~~2017~~2019 and June 30, ~~2017.~~2019. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.

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. ~~In connection with the acquisition~~

For the three months ended September 30, 2019 and 2018, we recognized revenues of $219.3 million and $198.4 million, respectively. Of the $219.3 million recognized in the third quarter of 2019, we recognized revenues of $4.8 million from obligations satisfied, or partially satisfied, in prior periods, of which $3.7 million was primarily due to the release of allowances on unbilled services as a result of securing contract amendments and $1.1 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $198.4 million recognized in the third quarter of 2018, we recognized revenues of $7.6 million from obligations satisfied, or partially satisfied, in prior periods, of which $4.3 million was primarily due to the release of allowances on unbilled services as a result of securing contract amendments and $3.3 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements.

For the nine months ended September 30, 2019 and 2018, we recognized revenues of $644.5 million and $589.7 million, respectively. Of the $644.5 million recognized in the first nine months of 2019, we recognized revenues of $2.6 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 the first nine months of 2019, we recognized a $1.4 million decrease to revenues due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $589.7 million recognized in the first nine months of 2018, we recognized revenues of $10.1 million from obligations satisfied, or partially satisfied, in prior periods, of which $6.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $3.6 million was primarily due to the release of allowances on unbilled services as a result of securing contract amendments.

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 policy. Our deferred revenues balance as of September 30, 2019 and December 31, 2018, was $31.2 million and $28.1 million, respectively. The $3.1 million increase primarily reflects timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the three and nine months ended September 30, 2019, $3.4 million and $21.4 million, respectively, of revenues recognized were included in the deferred revenue balance as of December 31, 2018.

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, 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.

See Note 8 “Financing Arrangements” for further information on the convertible senior notes and warrants related to the issuance of convertible notes.

~~As of September 30, 2017, we had~~We currently have a share repurchase program ~~authorized by our board of directors, pursuant~~permitting us to ~~which we may, from time to time,~~ repurchase up to $125 million of our common stock through October 31, ~~2017~~2019 (the “Share Repurchase Program”). During the fourth quarter of ~~2017,~~2019, our board of directors authorized an extension of the Share Repurchase Program through October 31, ~~2018.~~2020. The amount and timing of the repurchases will 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. No shares were repurchased during the first nine months of ~~2017. In the first quarter of 2016, we repurchased~~2019 and ~~retired 982,192 shares for $55.3 million. No shares were repurchased in the second or third quarter of 2016.~~2018. As of September 30, ~~2017,~~2019, $35.1 million remains available for share repurchases.

~~Upon~~Prior to maturity, upon conversion, the Convertible Notes ~~will be~~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. Our ~~current~~ intent and policy iswas to settle conversions with a combination of cash and shares of common stock with the principal amount of the Convertible Notes paid in cash, in accordance with the settlement provisions of the Indenture.

The initial conversion rate for the Convertible Notes iswas 12.5170 shares of our common stock per $1,000 principal amount of the Convertible Notes, which iswas equal to an initial conversion price of approximately $79.89 per share of our common stock. The conversion rate ~~will be~~would have been subject to adjustment upon the occurrence of certain specified events but ~~will~~would not be adjusted for accrued and unpaid interest, except in certain limited circumstances described in the Indenture. Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture) the Company ~~will,~~would, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change. Additionally, if the Company ~~undergoes~~underwent a “fundamental change” (as defined in the Indenture), a holder ~~will have~~had the option to require the Company to repurchase all or a portion of its Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus any accrued and unpaid interest. As discussed below, the convertible note hedge transactions and warrants, which were entered into in connection with the Convertible Notes, effectively ~~raise~~raised the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share.

On or after July 1, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder ~~may convert~~could have converted all or a portion of its Convertible Notes, regardless of the foregoing circumstances.

We have 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-convertible debt borrowing rate. The carrying value of the equity component representing the conversion option, which is 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 iswas amortized to interest expense using an effective interest rate of 4.751% over the term of the Convertible Notes. ~~As of September 30, 2017, the remaining life of the Convertible Notes is 2.0 years.~~ The equity component will not be remeasured as long as it continues 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 ~~are~~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 ~~are~~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.

The following table presents the amount of interest expense recognized related to the Convertible Notes for the periods presented.

To determine the appropriate accounting treatment for our 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.

The convertible debt investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. We ~~estimated~~estimate the fair value of our investment using a Monte Carlo simulation model, cash flow projections discounted at a risk-adjusted rate, and certain assumptions related to equity volatility ~~default probability,~~ and ~~recovery rate,~~applicable holding period, all of which are Level 3 inputs. 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 ~~investment.~~investment on our consolidated balance sheets.

statements which provide the fair value of the life insurance policies' underlying investments, which are Level 2 inputs. The cash surrender 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.

Financial assets and liabilities not recorded at fair value are as follows:

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 8 “Financing Arrangements” for additional information on our senior secured credit facility.

The carrying value of our promissory note due 2024 is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the promissory note bears interest at rates based on current market rates as set forth in the terms of the promissory note. Refer to Note 8 “Financing Arrangements” for additional information on our promissory note due 2024.

The ~~differences~~difference between the $250 million principal amount of the Convertible Notes and the carrying ~~amounts~~amount shown ~~above represent~~as of December 31, 2018 represents the unamortized debt discount and issuance costs. As of September 30, ~~2017~~2019, and December 31, ~~2016,~~2018, the carrying value of the equity component of $39.3 million was unchanged from the date of issuance. Refer to Note 8 “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 quarters ended September 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

Based on the closing price of our common stock of $61.34 on September 30, 2019, the if-converted value of the Convertible Notes was less than the principal amount.

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.

The ~~tables~~table below ~~set~~sets forth the components of other comprehensive income (loss), net of tax, for the three and nine months ended September 30, ~~2017~~2019 and ~~2016.~~2018.

The before tax amounts reclassified from accumulated other comprehensive income related to our cash flow hedges are recorded to interest expense, net of interest income.

For the three months ended September 30, ~~2017,~~2019, our effective tax rate was ~~(92.4)%~~15.0% as we recognized income tax ~~benefit~~expense from continuing operations of ~~$2.0~~$2.4 million on income from continuing operations of ~~$2.1~~$16.1 million. The effective tax rate of 15.0% was more favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to a discrete tax benefit of $0.7 million for U.S. federal return to provision adjustments related to the 2018 corporate income tax return, which had a favorable impact of 4.6% on the effective tax rate. In addition, we recognized a $0.7 million discrete tax benefit related to 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, which had a favorable impact of 4.6% on the effective tax rate. For the ~~third quarter of 2016,~~three months ended September 30, 2018, our effective tax rate was ~~37.2%~~14.4% as we recognized income tax expense from continuing operations of $1.4 million on income from continuing operations of $9.6 million. The effective tax rate of 14.4% was more favorable than the statutory rate, inclusive of state income taxes, of 26.0% primarily due to a discrete tax benefit of $0.8 million for U.S. federal return to provision adjustments related to the 2017 corporate income tax return, which had a favorable impact of 8.6% on the effective tax rate. In addition, the third quarter of 2018 included a discrete tax benefit of $0.4 million for foreign return to provision adjustments, which had a favorable impact of 3.7% on the effective tax rate.

For the nine months ended September 30, 2019, our effective tax rate was 20.8% as we recognized income tax expense from continuing operations of $7.3 million on income from continuing operations of ~~$19.6~~$34.9 million. The effective tax rate ~~for the three months ended September 30, 2017~~of 20.8% was more favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to ~~recognizing~~$1.0 million of discrete tax benefit recognized primarily in the third quarter of 2019 related to U.S. federal and foreign return to provision adjustments, which had a ~~$2.7~~favorable impact of 2.8% on the effective tax rate. In addition, we recognized a $0.7 million discrete tax benefit in the third quarter of 2019 related to a previously unrecognized tax benefit ~~from~~due to the expiration of statute of limitations on our "check-the-box" election made in ~~2014~~2015 to treat ~~one of our~~certain wholly-owned foreign subsidiaries as a disregarded ~~entity~~entities for ~~U.S~~U.S. federal income tax purposes. This benefit was partially offset by $0.6 million of tax expense recorded in the third quarter of 2017 to correct an error that occurred in the second quarter of 2017. During the third quarter of 2017, we also recordedpurposes, which had a $3.1 million adjustment to decrease deferred income taxes, net and increase income tax receivable on our consolidated balance sheet to correct an error that occurred in the second quarter of 2017. These errors have no impact on full year 2017 results, and we concluded that thefavorable impact of ~~both errors was not material to~~2.1% on the ~~second and third quarter financial statements. The~~ effective tax rate for the three months ended September 30, 2016 was lower than the statutory rate, inclusive of state income taxes, primarily due to non-taxable income, valuation allowance reductions, and certain credits and deductions, partially offset by non-deductible business expenses.

As of September 30, ~~2017,~~2019, we had ~~$0.8~~$0.1 million of unrecognized tax benefits which would affect the effective tax rate of continuing operations if recognized.

During the nine months ended September 30, 2018, we reached a settlement agreement related to Huron's claim in a class action lawsuit, resulting in a gain of $2.5 million.

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 Quarterly Report on Form 10-Q, we are not a party to any litigation or legal proceeding that, in the current opinion of management, could 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 in the form of letters of credit totaling ~~$2.7~~$1.5 million and ~~$4.8~~$1.6 million were outstanding at September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively, primarily to support certain office lease obligations.

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

~~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.

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 ~~three~~3 operating segments, which are our reportable segments: Healthcare, ~~Education, and Business Advisory.~~

Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Unallocated corporate costs include 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, certain office facility costs, costs relating to accounting and finance, human resources, legal, marketing, information technology, and ~~Company-wide~~company-wide business development functions, as well as costs related to overall corporate management.

In this Quarterly Report on Form 10-Q, 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 Quarterly Report on Form 10-Q 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,” “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 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,"” in our Annual Report on Form 10-K for the year ended December 31, ~~2016 and under Part II, Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q,~~2018 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.

Huron is a global ~~professional services firm committed to achieving sustainable results in partnership with clients. We bring a depth of expertise in strategy, technology, operations, advisory services,~~consultancy that helps clients drive growth, enhance performance and ~~analytics to drive lasting and measurable results~~sustain leadership in the ~~healthcare, higher education, life sciences~~markets they serve. We partner with clients to develop strategies and ~~commercial sectors. Through focus, passion and collaboration, we provide guidance and~~implement solutions that enable the transformative change our clients need to ~~support organizations as they contend with the changes transforming~~own their ~~industries and businesses.~~future.

We provide professional services through three operating segments: Healthcare, ~~Education,~~Business Advisory, and ~~Business Advisory.~~Education.

A large portion of our revenues is generated by our full-time consultants who provide consulting 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 ~~cultural transformation consultants from our Studer Group solution, which include~~leadership coaches and their support staff from our Healthcare Leadership solution, specialized finance and operational consultants, 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. We refer to 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 consultants 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 leadership 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.

We generate our revenues from providing professional services under four types of billing arrangements: fixed-fee (including software license revenue)~~, time-and-expense, performance-based,~~; time-and-expense; performance-based; and software support, ~~and~~ maintenance and subscriptions.

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. ~~In these engagements, it~~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~~to-date versus our estimates of the total services to be provided under the engagement. Contracts within our ~~Studer Group~~Healthcare Leadership solution ~~are~~include fixed-fee partner contracts with multiple ~~deliverables,~~performance obligations, which primarily consist of coaching services, as well as speaking engagements, conferences, ~~materials~~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 ~~service is~~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 ~~46.5%~~46.7% and ~~44.5%~~47.3% of our revenues for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~45.9%~~46.5% and ~~48.5%~~47.7% of our revenues for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

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 ~~Studer Group~~Healthcare Leadership solution. We recognize revenues under time-and-expense billing arrangements as the related services or publications are provided. Time-and-expense engagements represented ~~43.9%~~39.7% and ~~42.2%~~43.1% of our revenues for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~44.4%~~40.0% and ~~37.6%~~41.6% of our revenues for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

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~~fixed-fee or ~~fixed-fee~~time-and-expense engagements. We ~~do not~~ recognize revenues under performance-based billing arrangements ~~until all related~~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 ~~criteria are met.~~approach. Performance-based fee revenues represented ~~4.0%~~8.2% and ~~8.2%~~4.2% of our revenues for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~4.4%~~8.2% and ~~9.1%~~5.2% of our revenues for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. ~~Performance-based fee engagements~~The level of performance-based fees earned may ~~cause significant variations in quarterly revenues~~vary based on our clients' risk sharing preferences and ~~operating results depending on~~ the ~~timing~~mix of ~~achieving the performance-based criteria.~~services we provide.

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, ~~and~~ maintenance and subscription revenues are recognized ratably over the support or subscription ~~period, which ranges from one to three years.~~period. These fees are billed in advance and included in deferred revenues until recognized. Software support, ~~and~~ maintenance and subscription revenues represented

Our quarterly results are impacted principally by our full-time consultants’ utilization rate, the bill rates we charge our clients, and the number of our revenue-generating professionals who are available to ~~work, and the amount of performance-based fees recognized, which often vary significantly between quarters.~~work. 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.

Our primary strategy is to meet the needs of our clients by providing a balanced portfolio of service offerings and capabilities so that we can adapt quickly and effectively to emerging opportunities in the marketplace. To achieve this, we continue to hire highly qualified professionals and have entered into select acquisitions of complementary businesses.

To expand our business, we will remain focused on growing our existing relationships and developing new relationships, executing our managing director compensation plan to attract and retain senior practitioners, continuing to promote and provide an integrated approach to service delivery, broadening the scope of our existing services, and acquiring complementary businesses. We will regularly evaluate the performance of our practices to ensure our investments meet these objectives. Furthermore, we intend to enhance our visibility in the marketplace by refining our overarching messaging and value propositions for the organization as well as each practice. We will continue to focus on reaching our client base through clear, concise, and endorsed messages.

We also assess our results of operations using certain non-GAAP financial measures. These non-GAAP financial measures differ from GAAP because the non-GAAP financial measures we calculate to measure earnings ~~(loss)~~ before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income ~~(loss)~~ from continuing operations, and adjusted diluted earnings ~~(loss)~~ per share from continuing operations 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 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.

These non-GAAP financial measures include adjustments for the following items:

adjustment related to 2017 Tax Reform items on our 2017 corporate tax return. The exclusion of the 2017 Tax Reform impact permits comparability with periods that were not impacted by this item.

Revenues ~~decreased $7.0~~increased $20.8 million, or ~~3.8%~~10.5%, to ~~$176.4~~$219.3 million for the third quarter of ~~2017~~2019 from ~~$183.4~~$198.4 million for the third quarter of ~~2016. Third quarter 2017~~2018. Of the overall $20.8 million increase in revenues, ~~included $13.4~~$19.5 million was attributable to an increase in revenues from our ~~acquisitions~~full-time billable consultants and $1.3 million was attributable to an increase in revenues from our full-time equivalents.

The increase in full-time billable consultant revenues reflected strengthened demand for services in all of ~~Innosight~~our segments, as discussed below in Segment Results, and ~~Pope Woodhead, which were completed subsequent~~was primarily attributable to an increase in the average number of billable consultants, partially offset by a decrease in the consultant utilization rate and average billing rate for the third quarter of ~~2016, as well as revenues from our acquisition of the international assets of ADI Strategies, which was also completed subsequent~~2019 compared to the third quarter of 2016 and has since been fully integrated into the Business Advisory segment. Third quarter 2017 revenues also included an incremental $1.7 million of revenue from our acquisition of Healthcare Services Management, Inc. ("HSM Consulting"), which was completed mid-third quarter 2016.

The ~~decrease~~increase in full-time equivalent revenues was primarily attributable to ~~a decrease in revenue from our Studer Group solution within our Healthcare segment and a decrease in license revenue in~~ our Education segment, as discussed below in Segment ~~Results.~~

Our total direct costs, including amortization of intangible assets and software development costs, increased ~~$4.0~~$14.6 million, or ~~3.6%~~11.3%, to ~~$116.4~~$144.2 million in the three months ended September 30, ~~2017,~~2019, from ~~$112.4~~$129.6 million in the three months ended September 30, ~~2016.~~2018. The ~~$4.0~~$14.6 million increase primarily related to a ~~$2.1~~$9.9 million increase in salaries and related expenses for our revenue-generating professionals, which was largely driven by increased headcount ~~from acquisitions and our ongoing cloud-based enterprise resource planning (ERP) investment, partially offset by a decrease in salaries and related expenses~~ in our ~~Healthcare segment as~~Business Advisory and Education segments; a result of headcount reductions. Additional increases included a $1.1 million increase in contractor expense, a $0.9 million increase in signing and retention bonuses for our revenue-generating professionals, a $0.6$3.7 million increase in performance bonus expense for our revenue-generating ~~professionals,~~professionals; and a ~~$0.5~~$1.5 million increase in share-based compensation expense for our revenue-generating professionals. ~~All of these~~These increases were partially offset by a ~~$1.4~~$0.5 million decrease in ~~amortization of intangible assets.~~signing, retention and other bonus expense for our revenue-generating professionals. As a percentage of revenues, our total direct costs increased to ~~66.0%~~65.8% during the third quarter of ~~2017~~2019 compared to ~~61.3%~~65.3% during the third quarter of ~~2016,~~2018, primarily due to the ~~items described above.~~increases in performance bonus expense and share-based compensation expense for our revenue-generating professionals, as percentages of revenues, partially offset by the decrease in signing, retention and other bonus expense for our revenue-generating professionals and revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals.

Total direct costs for the three months ended September 30, ~~2017~~2019 included ~~$2.7~~$1.2 million of amortization expense for ~~intangible assets, primarily representing customer contracts and software acquired in business combinations, and~~ internal software development costs and intangible assets, compared to ~~$4.1~~$1.0 million of amortization expense for the same prior year period. The ~~$1.4~~$0.2 million ~~decrease~~increase in amortization expense was primarily attributable to an increase in amortization for internal software development costs. Intangible asset amortization included within direct costs for the ~~decreasing amortization expense of~~three months ended September 30, 2019 and 2018 primarily related to technology and software, certain customer relationships and customer contracts acquired in connection with our ~~Studer Group acquisition, due to the accelerated basis of amortization.~~business acquisitions. See Note ~~5 "Acquisitions" and Note 6~~4 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information ~~about~~on our intangible assets.

Selling, general and administrative expenses increased ~~$3.3~~by $2.2 million, or ~~8.7%~~4.8%, to ~~$41.6~~$48.1 million in the third quarter of ~~2017~~2019 from ~~$38.3~~$45.9 million in the third quarter of ~~2016. Selling, general and administrative expenses for the third quarter of 2017 included $3.9 million from Innosight and Pope Woodhead.~~2018. The overall ~~$3.3~~$2.2 million increase primarily related to a ~~$1.9~~$1.2 million increase in ~~salaries and related expenses~~share-based compensation expense for our support ~~personnel,~~personnel; a ~~$0.9~~$1.0 million increase in ~~facilities~~computer and ~~other office-related expenses,~~related equipment expenses; and a ~~$0.7~~$0.6 million increase in ~~third-party consulting expenses, and a $0.5 million increase in travel related expenses,~~legal expenses. These increases were partially offset by a ~~$1.1~~$0.8 million decrease in ~~practice administration~~travel and ~~meetings~~entertainment expenses. As a percentage of revenues, selling, general and administrative expenses ~~increased~~decreased to ~~23.6%~~21.9% during the third quarter of ~~2017~~2019 compared to ~~20.9%~~23.1% during the third quarter of ~~2016,~~2018. This decrease was primarily ~~due~~attributable to revenue growth that outpaced an increase in salaries and related expenses for our support personnel, as well as decreases in travel and entertainment expenses and facilities expense. These decreases were partially offset by the ~~items described above.~~increases in share-based compensation expense for our support personnel and computer and related equipment expenses, as percentages of revenues.

Restructuring charges for the third quarter of ~~2017 totaled $1.3~~2019 were $0.1 million ~~compared~~and netted to ~~$1.0 million~~an immaterial amount for the third quarter of ~~2016. The $1.3~~2018.The $0.1 million charge recognized in the third quarter of 2019 primarily related to workforce reductions as we continue to better align resources with market demand.

~~Other~~Litigation and other losses (gains), net totaled ~~$0.9~~a gain of $0.6 million for the ~~three months ended September 30, 2017,~~third quarter of 2019, and ~~represents losses due~~consisted of remeasurement gains to decrease the ~~increase in the~~estimated fair value of ~~the liability~~our liabilities for ~~future expected~~ contingent consideration payments related to ~~acquisitions. In~~a business acquisition. Litigation and other losses (gains), net totaled a net loss of $0.9 million for the third quarter of ~~2016, we recognized $0.5 million~~2018, and consisted of net remeasurement losses ~~for~~to increase the ~~increase in the~~estimated fair value of ~~the~~ contingent consideration ~~liability.~~liabilities. 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. See Note 11 "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 ~~increased by $1.9~~decreased $1.6 million, or 18.7%, to ~~$9.9~~$7.0 million in the three months ended September 30, ~~2017 from $8.1~~2019 compared to $8.6 million in the three months ended September 30, ~~2016.~~2018. The ~~increase~~$1.6 million decrease in depreciation and amortization expense was primarily attributable to ~~an increase in~~decreasing amortization expense ~~for intangible assets~~of the trade name and customer relationships acquired in ~~the Innosight and Pope Woodhead acquisitions, which were completed subsequent~~our Studer Group acquisition, due to the ~~third quarter~~accelerated basis of ~~2016, and an increase~~amortization in ~~amortization expense for a customer-related intangible asset~~prior periods, as well as certain customer relationships acquired in ~~the Studer Group acquisition.~~other business acquisitions that were fully amortized in prior periods. Intangible asset amortization expense included within operating expenses primarily ~~relates~~related to certain customer relationships, trade names, and non-competition agreements ~~and trade names~~ acquired in connection with our business acquisitions. See Note ~~5 "Acquisitions" and Note 6~~4 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information ~~about~~on our intangible assets.

Operating income ~~decreased $17.1~~increased $7.0 million to ~~$6.1~~$20.6 million in the third quarter of ~~2017~~2019 from ~~$23.2~~$13.6 million in the third quarter of ~~2016.~~2018. Operating margin, which is defined as operating income expressed as a percentage of revenues, ~~decreased to 3.5%~~was 9.4% in the three months ended September 30, ~~2017,~~2019, compared to ~~12.7%~~6.8% in the three months ended September 30, ~~2016.~~2018. The ~~decrease~~increase in operating margin was primarily attributable to ~~increases~~the decrease in intangible asset amortization, revenue growth that outpaced the increase in salaries and related expenses for ~~both~~ our ~~revenue-generating professionals and~~ support personnel, ~~contractor expense, facilities~~and the decrease in litigation and other ~~office-related expenses, signing~~losses (gains), net; partially offset by the increases in performance bonus expense and ~~retention bonuses for our revenue-generating professionals, and performance bonus~~share-based compensation expense for our revenue-generating professionals, ~~for the third quarter~~as percentages of ~~2017 compared to the same prior year period.~~revenues.

Total other expense, net increased ~~by $0.3~~$0.5 million to ~~$4.0~~$4.5 million in the third quarter of ~~2017~~2019 from ~~$3.7~~$3.9 million in the third quarter of ~~2016.~~2018. The increase in ~~total~~ other expense, net was primarily attributable to the immaterial gain recognized during the first nine months of 2019 for the market value of our investments that are used to fund our deferred compensation liability, compared to a gain of $0.7 million ~~increase~~recognized during the third quarter of 2018, partially offset by a decrease in interest expense, net of interest income ~~which was due to higher levels of borrowings and higher interest rates under our credit facility during~~recognized in the third quarter of ~~2017~~2019 compared to the third quarter of ~~2016. This increase was partially offset by $0.4~~2018. Interest expense, net of interest income decreased $0.3 million ~~of net foreign currency transaction gains~~to $4.4 million in the third quarter of ~~2017 compared to $0.1~~2019 from $4.6 million ~~of net foreign currency transaction losses~~ in the third quarter of ~~2016.~~2018. The decrease in interest expense was due to lower levels of borrowing under our credit facility, partially offset by higher interest rates during the third quarter of 2019 compared to the third quarter of 2018.

For the three months ended September 30, ~~2017,~~2019, our effective tax rate was (92.4)% as we recognized income tax benefit from continuing operations of $2.0 million on income from continuing operations of $2.1 million. For the third quarter of 2016, our effective tax rate was 37.2%15.0% as we recognized income tax expense from continuing operations of ~~$7.3~~$2.4 million on income from continuing operations of ~~$19.6~~$16.1 million. The effective tax rate ~~for the three months ended September 30, 2017~~of 15.0% was more favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to ~~recognizing~~ a ~~$2.7~~discrete tax benefit of $0.7 million for U.S. federal return to provision adjustments related to the 2018 corporate income tax return, which had a favorable impact of 4.6% on the effective tax rate. In addition, we recognized a $0.7 million discrete tax benefit related to a previously unrecognized tax benefit ~~from~~due to the expiration of statute of limitations on our "check-the-box" election made in ~~2014~~2015 to treat ~~one of our~~certain wholly-owned foreign subsidiaries as a

Net income from continuing operations ~~decreased by $8.2~~increased $5.5 million to ~~$4.1~~$13.7 million for the three months ended September 30, ~~2017,~~2019 from ~~$12.3~~$8.2 million for the same period last year. As a result of the ~~decrease~~increase in net income from continuing operations, diluted ~~earnings~~income per share from continuing operations for the third quarter of ~~2017~~2019 was ~~$0.19~~$0.61 compared to ~~$0.57~~$0.37 for the third quarter of ~~2016.~~2018.

~~Net income from discontinued operations was $0.2~~EBITDA increased $4.8 million to $28.6 million for the three months ended September 30, 2017 and related to updated lease assumptions for vacated office space directly related to the sale of the Huron Legal segment. See Note 4 "Discontinued Operations" within the notes to our consolidated financial statements for additional information about our discontinued operations.

Adjusted net income from continuing operations ~~decreased $10.4~~increased $3.7 million to ~~$9.3~~$17.7 million in the third quarter of ~~2017~~2019 compared to ~~$19.7~~$14.1 million in the third quarter of ~~2016.~~2018. As a result of the ~~decrease~~increase in adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations was ~~$0.43~~$0.79 for the third quarter of ~~2017,~~2019, compared to ~~$0.92~~$0.64 for the third quarter of ~~2016.~~2018.

Healthcare segment revenues ~~decreased $23.8~~increased $9.6 million, or ~~23.1%~~10.6%, to ~~$79.6~~$100.0 million for the third quarter of ~~2017~~2019 from ~~$103.4~~$90.4 million for the third quarter of ~~2016. Revenues for the third quarter of 2017 included an incremental $1.7 million from our acquisition of HSM Consulting, which was completed mid-third quarter 2016.~~2018.

During the three months ended September 30, ~~2017,~~2019, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements,~~engagements; performance-based ~~arrangements,~~arrangements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~68.5%~~65.6%, ~~16.6%~~12.3%, ~~6.7%~~16.3%, and ~~8.2%~~5.8% of this segment’s revenues, respectively, compared to ~~67.0%~~66.8%, ~~13.4%~~17.4%, ~~13.4%~~9.3%, and ~~6.2%~~6.5% of this segment’s revenues, respectively, for the same prior year period.

The overall $9.6 million increase in revenues ~~operating results, and average billing rates due~~was attributable to an increase in revenues from our ~~level of execution and the timing of achievement of the performance-based criteria.~~

Healthcare segment operating income ~~decreased $13.0~~increased $6.2 million, or ~~33.6%~~23.4%, to ~~$25.8~~$32.9 million for the three months ended September 30, ~~2017~~2019 from ~~$38.8~~$26.6 million for the three months ended September 30, ~~2016.~~2018. The Healthcare segment operating margin, defined as segment operating income expressed as a percentage of segment revenues, ~~decreased~~increased to ~~32.4%~~32.9% for the third quarter of ~~2017~~2019 from ~~37.5%~~29.5% in the same period last year. The ~~decrease~~increase in this segment’s operating margin was primarily attributable to anrevenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals and support personnel, as well as decreases in contractor expense and restructuring charges; partially offset by an increase in performance bonus expense and share-based compensation expense for our revenue-generating professionals, as a percentage of revenues, as well as increases in contractor expenses, product and event costs, and signing and retention bonus expense for our revenue-generating professionals. These decreases to the operating margin are partially offset by decreases in performance bonus expense for our revenue-generating professionals, practice administration and meetings expenses, and intangible asset amortization expense, all as a percentage of revenues.

~~Education~~Business Advisory segment revenues increased ~~$2.8~~$5.3 million, or ~~7.3%~~9.3%, to ~~$41.4~~$62.5 million for the third quarter of ~~2017~~2019 from ~~$38.6~~$57.2 million for the third quarter of ~~2016.~~2018.

During the three months ended September 30, ~~2017,~~2019, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements,~~engagements; performance-based arrangements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~16.2%~~38.9%, ~~78.1%~~56.3%, 2.6%, and ~~5.7%~~2.2% of this segment’s revenues, respectively. During the three months ended September 30, ~~2016,~~2018, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements, performance-based arrangements,~~engagements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~12.2%~~42.2%, ~~80.4%, 1.6%~~56.3%, and ~~5.8%~~1.5% of this ~~segment’s~~segment's revenues, ~~respectively.~~respectively, for the same prior year period. Performance-based fee revenue was $1.6 million for the third quarter of 2019 and was immaterial for the third quarter of 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 ~~$2.8~~$5.3 million increase in revenues, ~~$4.3~~$5.8 million was attributable to an increase in revenues from our full-time billable ~~consultants, which was~~consultants; partially offset by a ~~$1.5~~$0.4 million decrease in ~~revenue attributable to~~revenues generated by our full-time equivalents. The increase in ~~revenue attributable to~~revenues from our full-time billable consultants reflected ~~increases~~an increase in the average number of billable consultants, partially offset by decreases in the average billing rate and the consultant utilization rate in the third quarter of 2019 compared to the same prior year period. The decrease in revenues generated by our full-time equivalents was driven by a decreased use of contractors; and reflected a decrease in the average number of full-time ~~billable consultants and the consultant utilization rate,~~equivalents, partially offset by ~~a decrease~~an increase in ~~the average billing rate. The decrease in revenue from our full-time equivalents was largely driven by a decrease in license revenues, and reflected decreases in both~~ revenue per full-time equivalent ~~and the average number of full-time equivalents~~ in the third quarter of ~~2017~~2019 compared to the same prior year period.

~~Education~~Business Advisory segment operating income ~~decreased $3.1~~increased by $0.1 million, or ~~28.8%~~1.1%, to ~~$7.8~~$11.9 million for the three months ended September 30, ~~2017~~2019 from ~~$10.9~~$11.8 million for the three months ended September 30, ~~2016. Segment~~2018. The Business Advisory segment operating margin decreased to ~~18.7%~~19.1% for the third quarter of ~~2017~~2019 from ~~28.2%~~20.7% in the same period last year. The decrease in this segment’s operating margin was primarily attributable to increases in salaries and related expenses, performance bonus expense and ~~salaries and related expenses~~share-based compensation expense for our revenue-generating professionals, ~~as well as an increase in performance bonus expense for our support personnel,~~ all as ~~a percentage~~percentages of revenues. The increase in bonus expense was primarily the result of a significant performance bonus adjustment in the third quarter of 2017 to increase our year-to-date performance bonus accrual due to a revised full year forecast. These increases wererevenues; partially offset by decreases in ~~training~~signing, retention and other bonus expense for our revenue-generating professionals, practice and administration expenses, and ~~practice administration and meetings expenses.~~contractor expense.

~~Business Advisory~~Education segment revenues increased ~~$14.0~~$5.9 million, or ~~33.9%~~11.6%, to ~~$55.4~~$56.8 million for the third quarter of ~~2017~~2019 from ~~$41.4~~$50.9 million for the third quarter of 2016. Revenues for the third quarter of 2017 included $13.4 million from our acquisitions of Innosight and Pope Woodhead, which were completed subsequent to the third quarter of 2016. Third quarter 2017 revenues also included revenues from our acquisition of the international assets of ADI Strategies, which was completed in April 2017 and has since been fully integrated into the Business Advisory segment.2018.

During the three months ended September 30, ~~2017,~~2019, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements, performance-based arrangements,~~engagements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~37.5%~~21.9%, ~~57.7%, 3.0%~~69.9%, and ~~1.8%~~8.2% of this segment’s revenues, respectively, compared to ~~18.5%~~18.2%, ~~78.2%, 1.7%~~74.0%, and ~~1.6%~~7.8% of this segment’s revenues, respectively, for the same prior year period. Performance-based fee revenue was $1.7 million for the third quarter of 2017, compared to $0.7 million for the same prior year period. The level of performance-based fees earned may vary based on our clients’ preferences

Of the overall ~~$14.0~~$5.9 million increase in revenues, ~~$14.4~~$4.1 million was attributable to our full-time billable consultants ~~which~~and $1.9 million was ~~partially offset by a $0.4 million decrease in revenues~~ attributable to our full-time equivalents. The increase in ~~revenue from~~revenues attributable to our full-time billable consultants ~~was primarily driven by our acquisitions of Innosight, Pope Woodhead, and the international assets of ADI Strategies, and~~ 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.~~rate in the third quarter of 2019 compared to the same prior year period. The ~~decrease~~increase in ~~revenue~~revenues from our full-time equivalents ~~reflected a decrease in revenue per full-time equivalent, partially offset~~was primarily driven by an increase in software and data hosting revenues; and reflected increases in the average number of full-time equivalents and revenue per full-time equivalent in the third quarter of ~~2017~~2019 compared to the same prior year period.

~~Business Advisory~~Education segment operating income ~~increased by $4.2~~decreased $0.6 million, or ~~49.1%~~4.0%, to ~~$12.8~~$14.4 million for the three months ended September 30, ~~2017~~2019 from ~~$8.6~~$15.0 million for the three months ended September 30, ~~2016. Segment~~2018. The Education segment operating margin ~~increased~~decreased to ~~23.2%~~25.4% for the third quarter of ~~2017~~2019 from ~~20.8%~~29.5% in the same period last year. The ~~increase~~decrease in this segment’s operating margin was primarily attributable to ~~revenue growth that outpaced~~ increases in salaries and related expenses for our revenue generating professionals; contractor expense; share-based compensation expense and performance bonus expense for our revenue-generating ~~professionals, salaries~~professionals; and ~~related expenses for our revenue-generating professionals~~promotion and our support personnel, and contractor expenses. These increases to segment operating margin were partially offset by increases in travel related costs, signing and retention bonuses for our revenue-generating professionals, and third-party consulting expenses,marketing expense, all as ~~a percentage~~percentages of revenues.

Revenues ~~decreased $1.5~~increased $54.8 million, or ~~0.3%~~9.3%, to ~~$546.6~~$644.5 million for the first nine months of ~~2017~~2019 from ~~$548.1~~$589.7 million for the first nine months of ~~2016. Revenues for~~2018. Of the ~~first nine months of 2017 included $34.1~~overall $54.8 million ~~from our acquisitions of Innosight and Pope Woodhead, which were completed subsequent~~increase in revenues, $53.1 million was attributable to the third quarter of 2016, and $13.9 million of incremental revenues due to the full period impact of our acquisition of MyRounding Solutions, LLC ("MyRounding") and HSM Consulting, which we completed mid-first quarter 2016 and mid-third quarter 2016, respectively. Revenues for the first nine months of 2017 also included a full period impact of our acquisition of the U.S. assets of ADI Strategies andan increase in revenues from our ~~acquisition of the international assets of ADI Strategies. These acquisitions were completed in May 2016~~full-time billable consultants and ~~April 2017, respectively, and have since been fully integrated into the Business Advisory segment.~~

The ~~decrease~~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 ~~decreases in the average billing rate and consultant utilization rate, mostly offset by~~ an overall increase in the average number of full-time billable ~~consultants. As~~consultants during the first nine months of 2019 compared to the same prior year period.

The increase in full-time equivalent revenues was attributable to increases in full-time equivalent revenues in our Education and Healthcare segments, largely offset by a decrease in full-time equivalent revenues in our Business Advisory segment, as discussed below in Segment ~~Results, this~~Results; and reflected an overall increase in the average number of full-time equivalents, partially offset by an overall decrease in revenue was largely driven by decreased demand for services in our Healthcare segment, mostly offset by revenues from our acquisitions of Innosight and Pope Woodhead, as well as strengthened demand for services in our Business Advisory and Education segments.per full-time equivalent.

increase primarily related to ~~a $14.3~~an $18.2 million increase in salaries and related expenses for our revenue-generating professionals, which was largely driven by increased headcount ~~from acquisitions and our ongoing cloud-based ERP investment, partially offset by a decrease in salaries and related expenses~~ in our ~~Healthcare segment as a result of headcount reductions. Additional increases included a $2.8~~Education and Business Advisory segments; an $11.5 million increase in contractor expense, a $2.1 million increase in signing and retention bonus expense for our revenue-generating professionals, a $0.8 million increase in product and event costs, a $0.5 million increase in project costs, and a $0.5 million increase in technology expenses. These increases were partially offset by a $2.9 million decrease in intangible asset amortization expense and a $0.5 million decrease in performance bonus expense for our revenue-generating ~~professionals.~~professionals; a $2.9 million increase in share-based compensation expense for our revenue-generating professionals; and a $1.2 million increase in contractor expense. As a percentage of revenues, our total direct costs ~~increased~~decreased to ~~64.3%~~66.1% during the first nine months of ~~2017~~2019 compared to ~~61.0%~~66.5% during the first nine months of ~~2016~~2018 primarily due to revenue growth that outpaced the ~~items described above.~~increase in salaries and related expenses for our revenue-generating professionals, partially offset by the increase in performance bonus expense for our revenue-generating professionals, as a percentage of revenues.

Total direct costs for the nine months ended September 30, ~~2017~~2019 included ~~$8.4~~$3.5 million of amortization expense for ~~intangible assets, primarily representing customer contracts and software acquired in business combinations and~~ internal software development costs and intangible assets, compared to ~~$11.3~~$3.2 million of amortization expense for the same prior year period. The ~~$2.9~~$0.3 million ~~decrease~~increase in amortization expense was ~~primarily~~ attributable to ~~the decreasing~~a $0.9 million increase in amortization ~~expense of customer contracts~~for internal software development costs, partially offset by a $0.6 million decrease in intangible asset amortization attributable to certain intangible assets acquired in our Studer Group acquisition ~~due~~which were fully amortized in prior periods. Intangible asset amortization included within direct costs for the nine months ended September 30, 2019 and 2018 related to ~~the accelerated basis of amortization, partially offset by the amortization of intangible assets~~technology and software, certain customer relationships, publishing content and customer contracts acquired in ~~the Innosight acquisition, which we completed in the first quarter of 2017.~~connection with our business acquisitions. See Note ~~5 "Acquisitions" and Note 6~~4 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information about our intangible assets.

Selling, general and administrative expenses increased ~~$12.2~~$12.9 million, or ~~10.2%~~9.3%, to ~~$132.1~~$151.4 million in the nine months ended September 30, ~~2017,~~2019, from ~~$119.9~~$138.5 million in the nine months ended September 30, ~~2016. Selling, general and administrative expenses for the first nine months of 2017 included $9.8 million from Innosight and Pope Woodhead.~~2018. The overall ~~$12.2~~$12.9 million increase ~~was~~ primarily related to ~~an $8.5~~a $5.0 million increase in salaries and related expenses for our support ~~personnel,~~personnel; a ~~$2.2~~$2.4 million increase in ~~facilities and other office-related expenses,~~share-based compensation expense for our support personnel; a ~~$1.4~~$2.3 million increase in ~~travel~~computer and related ~~costs,~~equipment expenses; a ~~$1.2~~$1.9 million increase in ~~third-party consulting expenses, a $1.0 million increase in promotion and sponsorship expenses,~~legal expenses; and a $0.7 million increase ~~in signing and retention bonus expense for our support personnel. These increases were partially offset by a $2.5 million decrease~~ in performance bonus expense for our support ~~personnel and~~personnel. The increase in legal fees was primarily due to third-party transaction-related expenses related to the evaluation of a ~~$0.8 million decrease in share-based compensation expense for our support personnel.~~potential acquisition that ultimately did not consummate. As a percentage of revenues, selling, general and administrative expenses ~~increased to 24.2% during~~was 23.5% for both the first nine months of ~~2017 compared to 21.9% during the first nine months of 2016 primarily due to the items described above.~~2019 and 2018.

Litigation and $0.4 million related to workforce reductions in our corporate operations primarily to adjust our infrastructure to align with the decreased workforce in the Healthcare segment. The charges for the first nine months of 2016 primarily consisted of $1.5 million related to updated assumptions for lease accruals for our Washington, D.C. space vacated in the fourth quarter of 2014, $1.2 million related to workforce reductions in our Healthcare segment to better align resources with market demand, $0.9 million related to workforce reductions in our corporate operations as we adjusted our infrastructure to align with our Huron Legal divestiture, and $0.2 million related to the wind down of our foreign consulting operations based in the Middle East.

Depreciation and amortization expense ~~increased~~decreased by ~~$5.5~~$5.0 million, or 19.0%, to ~~$28.5~~$21.3 million in the nine months ended September 30, ~~2017,~~2019, from ~~$23.1~~$26.3 million in the nine months ended September 30, ~~2016.~~2018. The ~~increase~~decrease was primarily attributable to decreasing amortization expense ~~for intangible assets~~of the trade name and customer relationships acquired in ~~the Innosight, ADI Strategies, Pope Woodhead,~~our Studer Group acquisition and ~~HSM Consulting acquisitions, and an increase in amortization expense for a customer-related intangible asset~~certain customer relationships acquired in other business acquisitions, due to the ~~Studer Group acquisition.~~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 nine months ended September 30, 2019 and 2018 primarily ~~relates~~related to certain customer relationships, trade names and non-competition agreements acquired in connection with our business acquisitions. See Note ~~5 "Acquisitions" and Note 6~~4 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information about our intangible assets.

Operating income ~~decreased $246.2~~increased $10.2 million to ~~a loss of $180.3~~$45.2 million in the first nine months of ~~2017~~2019 from ~~income of $65.8~~$35.0 million in the first nine months of 2016. This decrease is primarily attributable to the $209.6 million non-cash pretax goodwill impairment charge recorded in the second quarter of 2017 related to our Healthcare segment. See the "Critical Accounting Policies" section below and Note 6 "Goodwill and Intangible Assets" within the notes to our consolidated financial statements for additional information on the non-cash goodwill impairment charge.2018. Operating margin, ~~decreased~~which is defined as operating income expressed as a percentage of revenues, increased to ~~(33.0)%~~7.0% for the nine months ended September 30, ~~2017,~~2019, compared to ~~12.0%~~5.9% for the nine months ended September 30, ~~2016.~~2018. The ~~decrease~~increase in operating margin was primarily attributable to the ~~goodwill impairment charge, as well as increases~~revenue growth that outpaced the increase in salaries and related expenses for ~~both~~ our revenue-generating professionals and ~~support personnel, contractor expenses, and signing and retention bonuses~~the decrease in intangible asset amortization expense; partially offset by the increase in performance bonus expense for our revenue-generating professionals, ~~during the first nine months~~as a percentage of ~~2017 compared to the same prior year period.~~

Total other expense, net decreased by ~~$0.4~~$9.4 million to ~~$10.6~~$10.3 million in the first nine months of ~~2017~~2019 from ~~$11.0~~$19.8 million in the first nine months of ~~2016.~~2018. The decrease in total other expense, net was primarily attributable to a ~~$0.9~~$5.9 million ~~gain on sale~~loss recorded in the first nine months of 2018 related to the divestiture of our ~~Life Sciences Compliance and Operations solution~~Middle East practice within our Business Advisory ~~segment in~~segment. During the second quarter of ~~2017. See Note 6 "Goodwill and Intangible Assets" within~~2018, we sold our Middle East business to a former employee who was the ~~notes to our consolidated financial statements for additional information on~~practice leader of that business at the ~~sale.~~time. The decrease in total other expense, net was also attributable to a ~~$1.8~~$2.8 million gain inrecognized during the first nine months of 2019 for the market value of our investments that are used to fund our deferred compensation liability, compared to a ~~$1.0~~gain of $0.9 million ~~gain~~during the first nine months of 2018. Interest expense, net of interest income decreased $1.5 million to $13.2 million in the first nine months of ~~2016. These decreases were partially offset by a $1.5~~2019 from $14.6 million ~~increase in interest expense, net of interest income~~ in the first nine months of ~~2017 compared to the same prior year period.~~2018. The ~~increase~~decrease in interest expense was due to ~~higher~~lower levels of ~~borrowings and higher interest rates~~borrowing under our credit facility during the first nine months of ~~2017~~2019 compared to the same prior year period, partially offset by higher interest rates during the first nine months of ~~2016.~~2019 compared to the same prior year period.

For the nine months ended September 30, ~~2017,~~2019, our effective tax rate was ~~26.1%~~20.8% as we recognized income tax ~~benefit~~expense from continuing operations of ~~$49.7~~$7.3 million on ~~a loss~~income from continuing operations of ~~$190.9~~$34.9 million. The effective tax rate of 20.8% was more favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to $1.0 million of discrete tax benefit recognized primarily in the third quarter of 2019 related to U.S. federal and foreign return to provision adjustments, which had a favorable impact of 2.8% on the effective tax rate. In addition, we recognized a $0.7 million discrete tax benefit in the third quarter of 2019 related to 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, which had a favorable impact of 2.1% on the effective tax rate. For the nine months ended September 30, ~~2016,~~2018, our effective tax rate was ~~35.6%~~28.6% as we recognized income tax expense from continuing operations of ~~$19.5~~$4.4 million on income from continuing operations of ~~$54.8~~$15.3 million. The effective tax rate ~~for the nine months ended September 30, 2017~~of 28.6% was less favorable than the statutory rate, inclusive of state income taxes, of 26.0% primarily due to ~~the $61.2 million non-deductible portion of the goodwill impairment charge recorded in the second quarter of 2017, as well as $1.8 million of~~ discrete tax expense of $1.2 million for share-based compensation ~~related to~~awards that vested during the ~~adoption~~first quarter of ~~ASU 2016-09~~ ~~Improvements to Employee Share-Based Payment Accounting. Refer to Note 3 "New Accounting Pronouncements" for additional information~~2018, which had an unfavorable impact of 8.1% on the ~~adoption of ASU 2016-09. These~~effective tax rate. This unfavorable discrete ~~items were~~item was partially offset by a ~~$2.7~~$0.9 million discrete tax benefit recorded in the third quarter of ~~2017~~2018 related to U.S. federal and foreign return to provision adjustments, which had a ~~previously unrecognized tax benefit from our 2014 "check-the-box" election. The~~favorable impact of 6.1% on the effective tax rate for the nine months ended September 30, 2016 was lower than the statutory rate, inclusive of state income taxes, primarily due to the year-to-date impact of a discrete favorable adjustment to our state tax rate in the second quarter of 2016, non-taxable income, valuation allowance reductions, certain credits and deductions, and a discrete tax benefit related to share-based compensation, partially offset by non-deductible business expenses.rate.

Net income from continuing operations ~~decreased~~increased by ~~$176.5~~$16.7 million to ~~a net loss from continuing operations of $141.2~~$27.6 million for the nine months ended September 30, ~~2017,~~2019, from ~~net income from continuing operations of $35.3~~$10.9 million for the same prior year period. ~~This decrease is primarily attributable to the $209.6 million non-cash pretax goodwill impairment charge related to our Healthcare segment.~~ As a result of the ~~decrease~~increase in net income from continuing operations, diluted loss per share from continuing operations for the first nine months of 2017 was $6.59 compared to diluted earnings per share from continuing operations of $1.65 for the first nine months of 2016. The non-cash goodwill impairment charge had a $7.16 unfavorable impact on diluted earnings per share from continuing operations for the first nine months of ~~2017.~~

EBITDA ~~decreased $241.6~~increased $13.4 million to ~~a loss of $140.2~~$72.8 million for the nine months ended September 30, ~~2017,~~2019, from ~~earnings of $101.4~~$59.4 million for the nine months ended September 30, ~~2016.~~2018. Adjusted EBITDA ~~decreased $32.7~~increased $12.9 million to ~~$73.1~~$76.0 million in the first nine months of ~~2017~~2019 from ~~$105.8~~$63.1 million in the first nine months of ~~2016.~~2018. The ~~decrease~~increase in EBITDA was primarily attributable to the ~~non-cash goodwill impairment charge~~increase in revenues for the first nine months of ~~$209.6 million~~2019 compared to the same prior year period and the loss on the divestiture of our Middle East business within our Business Advisory segment recorded in the ~~second quarter~~first nine months of ~~2017.~~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 expenses, and performance bonus expense for our revenue-generating professionals; as well as the decrease in litigation and other gains, net recognized in the first nine months of 2019 compared to the same prior year period. The ~~decrease~~increase in adjusted EBITDA was primarily ~~due~~attributable to the ~~decrease in segment operating income, as discussed below in Segment Results, as well as an~~ increase in ~~corporate~~revenues, partially offset by the increases in salaries and related expenses ~~primarily due~~for our

revenue-generating professionals, selling, general and administrative expenses, and performance bonus expense for our revenue-generating professionals in the first nine months of 2019 compared to ~~our acquisitions of Innosight and Pope Woodhead.~~the same prior year period.

Adjusted net income from continuing operations ~~decreased $24.6~~increased $12.6 million to ~~$31.7~~$43.7 million in the first nine months of ~~2017~~2019 compared to ~~$56.3~~$31.1 million in the first nine months of ~~2016.~~2018. As a result of the ~~decrease~~increase in adjusted net income from continuing operations, adjusted

Healthcare segment revenues ~~decreased $62.3~~increased $23.8 million, or ~~19.2%~~8.8%, to ~~$261.3~~$295.6 million for the first nine months of ~~2017~~2019 from ~~$323.5~~$271.8 million for the first nine months of 2016. Revenues for the first nine months of 2017 included $13.9 million of incremental revenues due to the full period impact of our acquisitions of HSM Consulting and MyRounding, which we completed mid-first quarter 2016 and mid-third quarter 2016, respectively.2018.

During the nine months ended September 30, ~~2017,~~2019, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements,~~engagements; performance-based ~~arrangements,~~arrangements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~67.4%~~63.9%, ~~16.8%~~13.3%, ~~8.3%~~17.0%, and ~~7.5%~~5.8% of this segment’s revenues, respectively, compared to ~~70.4%~~67.2%, ~~10.7%~~15.7%, ~~13.1%~~10.2%, and ~~5.8%~~6.9% of this segment’s revenues, respectively, for the same prior year period.

Of the overall $23.8 million increase in revenues, ~~operating results,~~$22.7 million was attributable to an increase in revenues from our full-time billable consultants and $1.1 million was attributable to our full-time equivalents. The increase in revenues attributable to our full-time billable consultants reflected increases in the average billing ~~rates due~~rate and the average number of full-time billable consultants, partially offset by a decrease in the consultant utilization rate in the first nine months of 2019 compared to the same prior year period. The increase in revenues attributable to our ~~level~~full-time equivalents reflected an increase in the average number of ~~execution and~~full-time equivalents, partially offset by a decrease in revenue per full-time equivalent in the ~~timing~~first nine months of ~~achievement of~~2019 compared to the ~~performance-based criteria.~~same prior year period.

Healthcare segment operating income ~~decreased $35.6~~increased $15.9 million, or ~~29.9%~~20.3%, to ~~$83.6~~$94.1 million for the nine months ended September 30, ~~2017,~~2019, from ~~$119.2~~$78.2 million for the nine months ended September 30, ~~2016.~~2018. The Healthcare segment operating margin ~~decreased~~increased to ~~32.0%~~31.8% for the first nine months of ~~2017~~2019 from ~~36.9%~~28.8% in the same period last year. The increase in this segment’s operating margin was primarily attributable to revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals, partially offset by an increase in performance bonus expense for our revenue-generating professionals, as a percentage of revenues.

Business Advisory segment revenues increased $12.8 million, or 7.5%, to $183.6 million for the first nine months of 2019 from $170.8 million for the first nine months of 2018.

During the first nine months of 2019, revenues from fixed-fee engagements; time-and-expense engagements; performance-based arrangements; and software support, maintenance and subscription arrangements represented 39.6%, 56.8%, 1.5%, and 2.1% of this segment’s revenues, respectively, compared to 41.0%, 55.3%, 1.8%, and 1.9% of this segment’s revenues, respectively, during the same prior year period. Performance-based fee revenue was $2.8 million for the first nine months of 2019, compared to $3.1 million for the first nine months of 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 $12.8 million increase in revenues, $14.7 million was attributable to an increase in revenues from our full-time billable consultants, partially offset by a $1.9 million decrease in revenues attributable to our full-time equivalents. The increase in revenues from our full-time billable consultants was primarily driven by increases in the average number of full-time billable consultants and the consultant utilization rate, partially offset by a decrease in the average billing rate in the first nine months of 2019 compared to the same prior year period. The decrease in revenues from our full-time equivalents was driven by a decreased use of contractors and our part-time project consultants; and reflected a decrease in the average number of full-time equivalents, partially offset by an increase in revenue per full-time equivalent in the first nine months of 2019 compared to the same prior year period.

Business Advisory segment operating income decreased by $2.0 million, or 5.8%, to $33.0 million for the nine months ended September 30, 2019, from $35.0 million for the nine months ended September 30, 2018. The Business Advisory segment operating margin decreased to 18.0% for the first nine months of 2019 from 20.5% in the same period last year. The decrease in this segment’s operating margin was primarily attributable to an increase in ~~salaries and related expenses~~performance bonus expense for our revenue-generating professionals, as a percentage of revenues, as well as increases in salaries and related expenses for our support personnel, contractor expenses, product and event costs, and restructuring charges, partially offset by decreases in performance bonus expense for our revenue-generating professionals and support personnel as a percentage of revenues.

Education segment revenues increased ~~$15.8~~$18.2 million, or ~~14.1%~~12.4%, to ~~$127.6~~$165.3 million for the first nine months of ~~2017~~2019 from ~~$111.8~~$147.1 million for the first nine months of ~~2016.~~2018.

For the nine months ended September 30, ~~2017,~~2019, revenues from fixed-fee ~~engagements,~~engagements; time-and-expense ~~engagements, performance-based arrangements,~~engagements; and software support, ~~and~~ maintenance and subscription arrangements represented ~~15.8%~~22.9%, ~~78.5%, 0.3%~~69.1%, and ~~5.4%~~8.0% of this segment’s revenues, respectively, compared to ~~14.5%~~19.5%, ~~78.6%, 0.9%~~73.5%, and ~~6.0%~~7.0% of this segment's revenues, respectively, during the same prior year period.

Of the overall ~~$15.8~~$18.2 million increase in revenues, ~~$16.9~~$15.7 million was attributable to revenues generated by our full-time billable consultants ~~which~~and $2.5 million was ~~partially offset by a $1.1 million decrease in revenues~~ attributable to revenues generated by our full-time equivalents. The increase in ~~revenue~~revenues from our full-time billable consultants reflected ~~increases~~an increase in the average number of full-time billable ~~consultants and consultant utilization rate,~~consultants; partially offset by a decrease in the average billing ~~rate.~~rate in the first nine months of 2019 compared to the same prior year period. The ~~decrease~~increase in ~~revenue~~revenues from our full-time equivalents was ~~largely~~primarily driven by

Education segment operating income increased ~~$0.3~~$5.5 million, or ~~0.9%~~14.7%, to ~~$31.8~~$43.2 million for the nine months ended September 30, ~~2017,~~2019, from ~~$31.5~~$37.7 million for the nine months ended September 30, ~~2016.~~2018. The Education segment operating margin ~~decreased~~increased to ~~24.9%~~26.2% for the first nine months of ~~2017~~2019 from 28.1% in the same period last year. The decrease in this segment’s operating margin was primarily attributable to increases in performance bonus expense for both our revenue-generating professionals and support personnel, as well as an increase in salaries and related expenses for our revenue-generating professionals, all as a percentage of revenues, partially offset by decreases in training expenses and practice administration and meetings expenses.

Cash and cash equivalents ~~decreased $8.4~~increased $16.3 million to $49.4 million at September 30, 2019 from ~~$17.0~~$33.1 million at December 31, ~~2016 to $8.7 million at September 30, 2017.~~2018. As of September 30, ~~2017,~~2019, our primary sources of liquidity are cash on hand, cash flows from our U.S. operations, and borrowing capacity available under our credit facility.

Net cash provided by operating activities totaled ~~$52.4~~$51.7 million for the nine months ended September 30, ~~2017 and $79.7~~2019, compared to of $48.9 million for the ~~same period last year.~~nine months ended September 30, 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, 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.

The ~~decrease~~increase in cash provided by ~~operations~~operating activities for the first nine months of ~~2017~~2019 compared to cash provided by operating activities in the same prior year period was primarily attributable to ~~lower net income, the collection of a settlement receivable in the first quarter of 2016 and a decrease~~an increase in cash collections from clients infor the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018, largely offset by the amount paid for annual performance bonuses during the first ~~nine months~~quarter of ~~2017, partially offset by decreased vendor and tax payments.~~2019 compared to the first quarter of 2018.

Net cash used in investing activities was ~~$125.3~~$24.4 million and $13.5 million for the nine months ended September 30, ~~2017~~2019 and ~~$81.2 million for the same period last year.~~2018, respectively.

The use of cash in the first nine months of ~~2017~~2019 primarily consisted of ~~$106.9 million for the purchases of businesses and $20.1~~$10.0 million for purchases of property and equipment, primarily related to ~~leasehold improvements and~~ purchases of ~~furniture~~computers and ~~fixtures~~related equipment and leasehold improvements for new office spaces in certain ~~locations.~~locations; $7.5 million for payments related to internally developed software; $4.4 million for contributions to our life insurance policies which fund our deferred compensation plan; and $2.5 million for the purchase of a business in the third quarter of 2019.

We estimate that cash utilized for purchases of property and equipment and software development in ~~2017~~2019 will be approximately ~~$25.0~~$20 million to $24 million, primarily consisting of software development costs, leasehold improvements ~~furniture and fixtures,~~for certain office locations, and information technology related equipment to support our corporate infrastructure.

Net cash ~~provided by~~used in financing activities was ~~$64.3~~$11.1 million for the nine months ended September 30, ~~2017.~~2019. During the first nine months of ~~2017,~~2019, we paid $10.0 million to the sellers of certain business acquisitions for achieving specified financial performance targets in accordance with the related purchase agreements. Of the total $10.0 million payments made, $4.7 million is classified as a cash outflow from financing activities and represents the amount paid up to the fair value of the contingent consideration liability recorded as of the acquisition date. The remaining $5.3 million is classified as a cash outflow from operating activities. During the first nine months of 2019, we borrowed ~~$241.0~~$105.5 million under our credit facility, primarily to fund ~~our acquisitions of Innosight and Pope Woodhead and~~ our annual performance bonus payment, and made repayments on our ~~credit facility~~borrowings of ~~$170.0~~$105.9 million.

Net cash used in financing activities was ~~$48.0~~$43.1 million for the nine months ended September 30, ~~2016.~~2018. During the first nine months of ~~2016,~~2018, we ~~repurchased and retired $55.3 million of our common stock under our Share Repurchase Program, as defined below, and had net borrowings of $12.0~~borrowed $179.8 million under our credit facility ~~primarily~~and made repayments on our borrowings of $213.7 million. During the first nine months of 2018, we paid $7.8 million to ~~fund~~ the sellers of certain business acquisitions for achieving specified financial performance targets in accordance with the related purchase agreements. Of the total $7.8 million payments made, $4.9 million is classified as a cash outflow from financing activities and represents the amount paid up to the fair value of ~~HSM Consulting and~~ the ~~U.S. assets~~contingent consideration liability recorded as of ~~ADI Strategies and our annual performance bonus payment.~~the acquisition date. The remaining $2.9 million is classified as a cash outflow from operating activities.

~~As of September 30, 2017, we had~~We currently have a share repurchase program permitting us to repurchase up to $125 million of our common stock through October 31, ~~2017~~2019 (the "Share Repurchase Program"). During the fourth quarter of ~~2017,~~2019, our board of directors authorized an extension of the Share Repurchase Program through October 31, ~~2018.~~2020. The amount and timing of the repurchases will 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. ~~During the first nine months of 2016, we~~

At September 30, ~~2017,~~2019, we had $250.0 million principal amount of our 1.25% convertible senior notes outstanding, ~~$139.0~~$50.0 million outstanding under our senior secured credit facility, and ~~$5.0~~$4.0 million outstanding under a promissory note, as discussed below.

In September 2014, we issued $250.0 million principal amount of the Convertible Notes in a private offering. The Convertible Notes are senior unsecured obligations of the Company and ~~will pay~~paid interest semi-annually on April 1 and October 1 of each year at an annual rate of 1.25%. The Convertible Notes ~~will mature~~matured on October 1, ~~2019, unless earlier repurchased by the Company or converted in accordance with their terms.~~

In connection with the issuance of the Convertible Notes, we entered into convertible note hedge transactions and warrant transactions. The convertible note hedge transactions ~~are~~were intended to reduce the potential future economic dilution associated with the conversion of the Convertible Notes and, combined with the warrants, effectively ~~raise~~raised the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share. The convertible note hedge transactions expired in the third quarter of 2019. 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.

The carrying amount of our Convertible Notes as of September 30, 2019 and December 31, 2018, was $250.0 million and $242.6 million, respectively, which represented the $250.0 million principal amount net of unamortized debt discount and issuance costs. The carrying amount of our Convertible Notes is included in current maturities of long-term debt on the consolidated balance sheet.

For further information, see Note 8 “Financing Arrangements” within the notes to our consolidated financial statements.

The Company has a ~~$500~~$600 million senior secured revolving credit facility, subject to the terms of a Second Amended and Restated Credit Agreement dated as of March 31, 2015, as amended to date (as amended and modified the "Amended Credit ~~Facility"~~Agreement"), that becomes due and payable in full upon maturity on ~~March 31, 2020.~~September 27, 2024. 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 ~~$100~~$150 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 ~~$600~~$750 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under a prior credit agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, acquisitions of businesses, share repurchases, and 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 LIBOR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between ~~1.25%~~1.125% per annum and ~~2.00%~~1.875% per annum, in the case of LIBOR borrowings, or between ~~0.25%~~0.125% per annum and ~~1.00%~~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, including a requirement to pay all amounts outstanding under the Amended Credit Agreement 90 days prior to the Convertible Indebtedness Maturity Date (as defined in the Amended Credit Agreement) unless (1) the Convertible Indebtedness Maturity Date is waived or extended to a later date, (2) the Company can demonstrate (a) Liquidity (as defined in the Amended Credit Agreement) in an amount at least equal to the principal amount due on the Convertible Indebtedness Maturity Date, and (b) financial covenant compliance after giving effect to such payments and any additional indebtedness incurred on a pro forma basis, or (3) this requirement is waived by the Required Lenders (as defined in the Amended Credit Agreement).circumstances. 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) ~~ranging from 3.25~~of 3.75 to 1.00; however the maximum permitted Consolidated Leverage Ratio will increase to 4.00 to 1.00 ~~to 3.75 to 1.00, depending on~~upon the ~~measurement period,~~occurrence of certain transactions, and (ii) a minimum Consolidated Interest Coverage Ratio (defined as the ratio of consolidated EBITDA to interest) of 3.50 to 1.00. Consolidated EBITDA for purposes of the financial

The Amended 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 is greater than ~~3.00,~~3.25, the amount of dividends and other Restricted Payments (as defined in the Amended Credit Agreement) we may pay is limited to an amount up to $50 million plus 50% of cumulative consolidated net income (as defined in the Amended Credit Agreement) from the closing date of the Amended Credit Agreement plus 50% of the net cash proceeds from equity issuances after the closing date of the Amended Credit Agreement.$25 million.

Borrowings outstanding under the Amended Credit Agreement at September 30, ~~2017~~2019 totaled ~~$139.0~~$50.0 million. These borrowings carried a weighted average interest rate of ~~3.4%~~3.3%, including the impact of the interest rate swap in effect as of September 30, ~~2017~~2019 and described in Note 10 “Derivative ~~Instruments~~Instrument and Hedging Activity” within the notes to the consolidated financial statements. Borrowings outstanding under the Amended Credit Agreement at December 31, ~~2016~~2018 were ~~$68.0~~$50.0 million and carried a weighted average interest rate of ~~2.5%.~~3.7%, including the impact of the interest rate swap described in Note 10 “Derivative Instrument 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 September 30, ~~2017,~~2019, we had outstanding letters of credit totaling ~~$2.7~~$1.5 million, which are primarily used as security deposits for our office facilities. As of September 30, ~~2017,~~2019, the unused borrowing capacity under the revolving credit facility was ~~$358.3~~$548.5 million.

On October 1, 2019, we refinanced $217.0 million of the $250.0 million outstanding principal amount of the Convertible Notes with the borrowing capacity available under our revolving credit facility, which resulted in outstanding borrowings of $267.0 million. As of October 1, 2019, the unused borrowing capacity under the revolving credit facility was $331.5 million and our pro forma Consolidated Leverage Ratio was 2.16 to 1.00.

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 will 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 September 30, ~~2017,~~2019, the outstanding principal amount of the promissory note was ~~$5.0 million. As of September 30, 2017,~~$4.0 million, and the aircraft had a carrying amount of ~~$6.6~~$5.3 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.

For further information, see Note 8 “Financing Arrangements” within the notes to the consolidated financial statements.

Our primary financing need has been to fund our 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, the borrowing capacity available under our revolving credit facility, and access to external capital resources will be adequate to fund our long-term growth and capital needs arising from cash commitments and debt service obligations. Our ability to secure short-term and long-term financing in the future 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.

For a summary of our commitments to make future payments under contractual obligations, see ~~“Item~~Item 7. ~~Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual ~~Obligations”~~Obligations" in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

~~In connection with certain business acquisitions completed during the first nine months of 2017,~~On September 27, 2019, we entered into ~~contingent consideration arrangements, under which we may be required to pay post-closing consideration~~the fourth amendment (the "Fourth Amendment") to the ~~sellers if specific financial performance targets are met over a number~~Second Amended and Restated Credit Agreement dated as of ~~years~~March 31, 2015, as ~~specified in~~amended to date (as amended and modified the ~~related purchase agreements.~~"Amended Credit Facility"). The aggregate fair value of these contingent consideration liabilities on the dates of acquisition was $15.5 million. Refer to Note 5 “Acquisitions” within the notes to the consolidated financial statements for additional information on the businesses acquired during the first nine months of 2017. At September 30, 2017, the aggregate fair value of all contingent consideration liabilities outstanding was $22.5 million.

The capitalized terms above are defined in the ~~terms of the promissory note, we will pay interest on the outstanding principal amount at a rate of one-month LIBOR plus 1.97% per annum.~~

During October 2019, we entered into an amendment to the ~~schedule of monthly~~office lease agreement for our principal ~~payments.~~

We are not a party to any material off-balance sheet arrangements.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. 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 are those policies 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 are important, we believe there are five accounting policies 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. For a detailed discussion of these critical accounting policies, see ~~“Item~~Item 7. ~~Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2016. Below is an update to our critical accounting policy related to the carrying value of goodwill and other intangible assets. There have been no material changes to our other critical accounting policies during the first nine months of 2017.

Refer to Note 3 ~~“New~~"New Accounting ~~Pronouncements”~~Pronouncements" within the notes to the consolidated financial statements for information on new accounting pronouncements.

We are exposed to market risks primarily from changes in interest rates and changes in the market value of our investments.

The value of our Convertible Notes is exposed to interest rate risk. Generally, the fair value of our fixed interest rate Convertible Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of our Convertible Notes is affected by our stock price. The carrying value of our Convertible Notes was ~~$230.8~~$250.0 million as of September 30, ~~2017,~~2019, which ~~represents the liability component of~~equaled the $250.0 million principal ~~balance.~~balance due on October 1, 2019. The estimated fair value of our Convertible Notes at September 30, ~~2017~~2019 was ~~$233.6~~$249.5 million, and was determined based on the quoted bid price of the Convertible Notes in an over-the-counter market as of the last day of trading for the quarter ended September 30, ~~2017,~~2019, which was ~~$93.438~~$99.810 per $100 principal amount. At December 31, 2018, the carrying value of our Convertible Notes was $242.6 million, and the estimated fair value of our Convertible Notes was $242.9 million, which was determined based on the quoted bid price of the Convertible Notes in an over-the-counter market as of the last day of trading for the year ended December 31, 2018, which was $97.176 per $100 principal amount.

Concurrent with the issuance of the Convertible Notes, we entered into separate convertible note hedge and warrant transactions. The convertible note hedge transactions ~~are~~were intended to reduce the potential future economic dilution associated with the conversion of the Convertible Notes and, combined with the warrants, effectively ~~raise~~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 ~~have~~had the option to purchase a total of approximately 3.1 million shares of our 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 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.

We have exposure to changes in interest rates associated with borrowings under our bank credit facility, which has variable interest rates tied to LIBOR or an alternate base rate, at our option. At September 30, ~~2017,~~2019, we had borrowings outstanding under the credit facility totaling ~~$139.0~~$50.0 million that carried a weighted average interest rate of ~~3.4%~~3.3%, including the impact of the interest rate swap described below. ~~A hypothetical 100 basis point change in this interest~~As of September 30, 2019, these variable rate ~~would have a $0.9 million effect on our pretax income, on an annualized basis, including the effect of the interest rate swap. At December 31, 2016, our~~ borrowings outstanding under the credit facility totaled $68.0 million and carried a weighted average interest rate of 2.5%, including the effect of the interest rate swap described below. The outstanding borrowings at December 31, 2016 were fully hedged against changes in interest rates by ~~our~~the interest rate swap, which had a notional amount of ~~$68.0 million at December 31, 2016.~~

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 continue~~ 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 also have exposure to changes in interest rates associated with the promissory note assumed on June 30, 2017 in connection with our purchase of an aircraft, which has variable interest rates tied to LIBOR. At September 30, ~~2017,~~2019, the outstanding principal amount of the promissory note was ~~$5.0~~$4.0 million and carried an interest rate of ~~3.2%~~4.2%. A hypothetical 100 basis point change in this interest rate would not have a ~~$0.1~~material effect on our

pretax income. At December 31, 2018, the outstanding principal amount of the promissory note was $4.4 million and carried an interest rate of 4.3%. A hypothetical 100 basis point change in the interest rate as of December 31, 2018 would not have had a material effect on our pretax ~~income, on an annualized basis.~~income.

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.

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”~~"Exchange Act")) as of September 30, ~~2017.~~2019. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, ~~2017,~~2019, 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.

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 September 30, ~~2017~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The information required by this Item is incorporated by reference from Note 14 "Commitments, Contingencies and Guarantees" included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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 Quarterly Report on Form 10-Q, we are not a party to any litigation or legal proceeding that, in the current opinion of management, could 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.

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 September 30, ~~2017,~~2019, we reacquired ~~4,798~~12,657 shares of common stock with a weighted average fair market value of ~~$39.78~~$58.91 as a result of such tax withholdings.

None.

Not applicable.

Pursuant to the requirements 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.



Delaware		01-0666114
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HURN	NASDAQ Global Select Market



Large ~~accelerated filer~~Accelerated Filer		ý	☒	Accelerated ~~filer~~Filer	☐	o

Non-accelerated ~~filer~~Filer	☐	o ~~(Do not check if a smaller reporting company)~~Smaller Reporting Company		~~Smaller reporting company~~		o

			☐	Emerging ~~growth company~~Growth Company		o☐



		Page
Part I – Financial Information

Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations and Other Comprehensive Income	2
	Consolidated ~~Statement~~Statements of Stockholders’ Equity	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2826

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5144

Item 4.	Controls and Procedures	5245

Part II – Other Information

Item 1.	Legal Proceedings	5245

Item 1A.	Risk Factors	5245

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5445

Item 3.	Defaults Upon Senior Securities	5446

Item 4.	Mine Safety Disclosures	5446

Item 5.	Other Information	5446

Item 6.	Exhibits	5547

Signature		5648


	September 30, 2017			December 31, 2016			September 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	8,660		$	17,027		$	49,410		$	33,107
Receivables from clients, net	94,025			94,246			116,318			109,677
Unbilled services, net	65,432			51,290			99,784			69,613
Income tax receivable	4,018			4,211			713			6,612
Prepaid expenses and other current assets	15,106			13,308			14,211			13,922
Total current assets	187,241			180,082			280,436			232,931
Property and equipment, net	47,075			32,434			39,972			40,374
Deferred income taxes, net	15,159			—			1,108			2,153
Long-term investment	31,937			34,675			60,943			50,429
Operating lease right-of-use assets							52,342			—
Other non-current assets	26,149			24,814			45,005			30,525
Intangible assets, net	80,861			81,348			36,141			47,857
Goodwill	689,375			799,862			645,986			645,263
Total assets	$	1,077,797		$	1,153,215		$	1,161,933		$	1,049,532
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	10,259		$	7,273		$	10,440		$	10,020
Accrued expenses and other current liabilities	22,846			19,788			22,719			17,207
Accrued payroll and related benefits	62,451			82,669			108,111			109,825
Accrued contingent consideration for business acquisitions	7,743			1,985			—			9,991
Current maturities of long-term debt							250,525			243,132
Current maturities of operating lease liabilities							10,529			—
Deferred revenues	25,495			24,053			31,224			28,130
Total current liabilities	128,794			135,768			433,548			418,305
Non-current liabilities:
Deferred compensation and other liabilities	20,336			24,171			26,308			20,875
Accrued contingent consideration for business acquisitions, net of current portion	14,726			6,842			—			1,450
Long-term debt, net of current portion	374,328			292,065			53,457			53,853
Operating lease liabilities, net of current portion							59,460			—
Deferred lease incentives	15,236			10,703			—			13,693
Deferred income taxes, net	—			35,633			1,603			732
Total non-current liabilities	424,626			369,414			140,828			90,603
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 24,560,468 and 24,126,118 shares issued at September 30, 2017 and December 31, 2016, respectively	241			235
Treasury stock, at cost, 2,428,971 and 2,408,343 shares at September 30, 2017 and December 31, 2016, respectively	(121,395		)	(113,195		)
Common stock; $0.01 par value; 500,000,000 shares authorized; 25,337,297 and 25,114,739 shares issued at September 30, 2019 and December 31, 2018, respectively							248			244
Treasury stock, at cost, 2,416,530 and 2,568,288 shares at September 30, 2019 and December 31, 2018, respectively							(128,048		)	(124,794		)
Additional paid-in capital	431,211			405,895			469,257			452,573
Retained earnings	210,543			351,483			223,536			196,106
Accumulated other comprehensive income	3,777			3,615			22,564			16,495
Total stockholders’ equity	524,377			648,033			587,557			540,624
Total liabilities and stockholders’ equity	$	1,077,797		$	1,153,215		$	1,161,933		$	1,049,532



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenues and reimbursable expenses:
Revenues	$	176,376		$	183,400		$	546,643		$	548,148		$	219,289		$	198,448		$	644,488		$	589,671
Reimbursable expenses	17,982			19,093			55,862			54,636			23,636			21,296			65,787			59,648
Total revenues and reimbursable expenses	194,358			202,493			602,505			602,784			242,925			219,744			710,275			649,319
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses):
Direct costs	113,775			108,354			343,185			323,310			143,034			128,596			422,442			388,956
Amortization of intangible assets and software development costs	2,657			4,052			8,388			11,278			1,162			1,009			3,450			3,195
Reimbursable expenses	18,079			18,956			55,901			54,747			23,571			21,246			65,897			59,710
Total direct costs and reimbursable expenses	134,511			131,362			407,474			389,335			167,767			150,851			491,789			451,861
Operating expenses and other losses (gains), net:
Operating expenses and other losses (gains), net
Selling, general and administrative expenses	41,576			38,256			132,137			119,937			48,123			45,915			151,409			138,481
Restructuring charges	1,347			1,049			5,295			4,129			127			(31		)	2,156			2,665
Other losses (gains), net	880			494			(222		)	494
Litigation and other losses (gains), net													(630		)	887			(1,571		)	(4,990		)
Depreciation and amortization	9,946			8,092			28,549			23,064			6,962			8,561			21,285			26,281
Goodwill impairment charge	—			—			209,600			—
Total operating expenses and other losses (gains), net	53,749			47,891			375,359			147,624			54,582			55,332			173,279			162,437
Operating income (loss)	6,098			23,240			(180,328		)	65,825
Operating income													20,576			13,561			45,207			35,021
Other income (expense), net:
Interest expense, net of interest income	(4,880		)	(4,176		)	(13,811		)	(12,270		)	(4,374		)	(4,628		)	(13,156		)	(14,636		)
Other income, net	930			489			3,204			1,236
Other income (expense), net													(82		)	707			2,830			(5,131		)
Total other expense, net	(3,950		)	(3,687		)	(10,607		)	(11,034		)	(4,456		)	(3,921		)	(10,326		)	(19,767		)
Income (loss) from continuing operations before income tax expense	2,148			19,553			(190,935		)	54,791
Income tax expense (benefit)	(1,984		)	7,265			(49,740		)	19,498
Net income (loss) from continuing operations	4,132			12,288			(141,195		)	35,293
Income from continuing operations before taxes													16,120			9,640			34,881			15,254
Income tax expense													2,414			1,391			7,256			4,365
Net income from continuing operations													13,706			8,249			27,625			10,889
Income (loss) from discontinued operations, net of tax	238			4			690			(1,830		)	(52		)	228			(195		)	(304		)
Net income (loss)	$	4,370		$	12,292		$	(140,505	)	$	33,463
Net earnings (loss) per basic share:
Net income (loss) from continuing operations	$	0.19		$	0.58		$	(6.59	)	$	1.67
Net income													$	13,654		$	8,477		$	27,430		$	10,585
Net earnings per basic share:
Net income from continuing operations													$	0.62		$	0.38		$	1.26		$	0.50
Income (loss) from discontinued operations, net of tax	0.01			—			0.03			(0.08		)	—			0.01			(0.01		)	(0.01		)
Net income (loss)	$	0.20		$	0.58		$	(6.56	)	$	1.59
Net earnings (loss) per diluted share:
Net income (loss) from continuing operations	$	0.19		$	0.57		$	(6.59	)	$	1.65
Net income													$	0.62		$	0.39		$	1.25		$	0.49
Net earnings per diluted share:
Net income from continuing operations													$	0.61		$	0.37		$	1.23		$	0.50
Income (loss) from discontinued operations, net of tax	0.01			—			0.03			(0.09		)	—			0.01			(0.01		)	(0.02		)
Net income (loss)	$	0.20		$	0.57		$	(6.56	)	$	1.56
Net income													$	0.61		$	0.38		$	1.22		$	0.48
Weighted average shares used in calculating earnings per share:
Basic	21,505			21,076			21,413			21,084			22,052			21,745			21,973			21,683
Diluted	21,622			21,445			21,413			21,427			22,561			22,110			22,425			21,947
Comprehensive income (loss):
Net income (loss)	$	4,370		$	12,292		$	(140,505	)	$	33,463
Comprehensive income:
Net income													$	13,654		$	8,477		$	27,430		$	10,585
Foreign currency translation adjustments, net of tax	609			50			1,835			52			(630		)	(579		)	(673		)	(1,499		)
Unrealized loss on investment, net of tax	(2,200		)	(2,038		)	(1,669		)	(1,163		)
Unrealized gain (loss) on investment, net of tax													1,168			(852		)	7,740			4,473
Unrealized gain (loss) on cash flow hedging instruments, net of tax	23			121			(4		)	(27		)	(149		)	206			(998		)	821
Other comprehensive income (loss)	(1,568		)	(1,867		)	162			(1,138		)	389			(1,225		)	6,069			3,795
Comprehensive income (loss)	$	2,802		$	10,425		$	(140,343	)	$	32,325
Comprehensive income													$	14,043		$	7,252		$	33,499		$	14,380



	Three Months Ended September 30,
	Common Stock			Treasury Stock					Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income			Stockholders’ Equity
	Shares	Amount		Shares		Amount			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income			Stockholders’ Equity
Balance at June 30, 2019	24,711,193	$	247	(2,742,826	)	$	(127,133	)	$	463,190	$	209,882	$	22,175		$	568,361
Comprehensive income											13,654		389			14,043
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	58,164	1		(3,741	)	(169		)	168							—
Exercise of stock options	10,000	—							235							235
Share-based compensation									5,664							5,664
Shares redeemed for employee tax withholdings				(12,657	)	(746		)								(746		)
Balance at September 30, 2019	24,779,357	$	248	(2,759,224	)	$	(128,048	)	$	469,257	$	223,536	$	22,564		$	587,557

Balance at June 30, 2018	24,325,302	$	244	(2,633,755	)	$	(123,215	)	$	441,813	$	184,507	$	15,390		$	518,739
Comprehensive income											8,477		(1,225		)	7,252
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	45,485	—		(13,688	)	(583		)	583							—
Exercise of stock options	10,000	—							234							234
Share-based compensation									4,019							4,019
Shares redeemed for employee tax withholdings				(8,241	)	(371		)								(371		)
Balance at September 30, 2018	24,380,787	$	244	(2,655,684	)	$	(124,169	)	$	446,649	$	192,984	$	14,165		$	529,873



	Nine Months Ended September 30,
	Common Stock			Treasury Stock					Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Stockholders’ Equity
	Shares	Amount		Shares		Amount			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Stockholders’ Equity
Balance at December 31, 2018	24,418,252	$	244	(2,671,962	)	$	(124,794	)	$	452,573		$	196,106	$	16,495	$	540,624
Comprehensive income												27,430		6,069		33,499
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	331,105	4		21,433		1,952			(1,956		)					—
Exercise of stock options	30,000	—							703							703
Share-based compensation									17,937							17,937
Shares redeemed for employee tax withholdings				(108,695	)	(5,206		)								(5,206		)
Balance at September 30, 2019	24,779,357	$	248	(2,759,224	)	$	(128,048	)	$	469,257		$	223,536	$	22,564	$	587,557

Balance at December 31, 2017	24,098,822	$	241	(2,591,135	)	$	(121,994	)	$	434,256		$	180,443	$	10,370	$	503,316
Comprehensive income												10,585		3,795		14,380
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	251,965	3		20,407		916			(919		)					—
Exercise of stock options	30,000	—							703							703
Share-based compensation									12,609							12,609
Shares redeemed for employee tax withholdings				(84,956	)	(3,091		)								(3,091		)
Cumulative-effect adjustment from adoption of ASC 606												1,956				1,956
Balance at September 30, 2018	24,380,787	$	244	(2,655,684	)	$	(124,169	)	$	446,649		$	192,984	$	14,165	$	529,873



	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



Fair value of consideration transferred
Cash	$	90,725
Common stock	9,560
Contingent consideration liability	12,050
Net working capital adjustment	1,272
Total consideration transferred	$	113,607



	March 1, 2017
Assets acquired:
Accounts receivable	$	7,752
Unbilled services	1,881
Prepaid expenses and other current assets	468
Property and equipment	419
Intangible assets	18,015
Liabilities assumed:
Accounts payable	531
Accrued expenses and other current liabilities	916
Accrued payroll and related benefits	883
Deferred revenues	30
Total identifiable net assets	26,175
Goodwill	87,432
Total purchase price	$	113,607



	Fair Value		Useful Life in Years
Customer relationships	$	9,500	6
Trade name	6,000		6
Customer contracts	1,000		1
Non-compete agreements	1,300		5
Favorable lease contract	215		1
Total intangible assets subject to amortization	$	18,015



	Healthcare			Business Advisory			Education		Total
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 acquisition ⁽¹⁾	—			—			1,060		1,060
Foreign currency translation	—			(337		)	—		(337		)
Goodwill, net as of September 30, 2019	$	428,729		$	113,368		$	103,889	$	645,986



		As of September 30, 2017				As of December 31, 2016
	Useful Life in Years	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	4 to 13	$	106,174	$	47,325	$	89,279	$	34,827
Trade names	2 to 6	29,016		17,065		22,930		11,652
Customer contracts	1 to 4	27,554		25,919		26,497		21,295
Technology and software	3 to 5	9,340		4,490		8,970		2,667
Non-competition agreements	1 to 5	5,295		2,482		3,685		1,697
Publishing content	3	3,300		2,888		3,300		2,062
Favorable lease contract	3	720		369		720		203
In-process technology	Indefinite	—		—		370		—
Total		$	181,399	$	100,538	$	155,751	$	74,403


Year Ending December 31,	Estimated Amortization Expense		Estimated Amortization Expense
2017	$	34,966
2018	$	23,936
2019	$	17,279	$	17,484
2020	$	12,116	$	12,978
2021	$	8,070	$	8,306
2022	$	6,092	$	6,114
2023			$	3,512
2024			$	741



Future Lease Payments	September 30, 2019			December 31, 2018 ^{(1, 2)}
2019	$	3,358		$	13,701
2020	13,574			12,724
2021	12,514			11,590
2022	11,623			10,766
2023	11,606			10,707
Thereafter	28,742			27,033
Total operating lease payments	$	81,417		$	86,521
Less: imputed interest	(11,428		)	n/a
Present value of operating lease liabilities	$	69,989		n/a


(1)	~~Refer to Note 5 "Acquisitions" for additional information on~~On September 30, 2019, we completed the ~~goodwill recorded~~acquisition of a business in ~~connection with~~our Education segment. The results of operations of the acquired business ~~acquisitions.~~



		As of September 30, 2019				As of December 31, 2018
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	3 to 13	$	91,614	$	63,109	$	98,235	$	60,462
Trade names	5 to 6	28,930		25,215		28,930		23,181
Technology and software	3 to 5	5,694		3,951		5,694		2,842
Non-competition agreements	3 to 5	2,515		1,607		3,650		2,241
Customer contracts	2	1,270		—		—		—
Favorable lease contract	3	—		—		720		646
Total		$	130,023	$	93,882	$	137,229	$	89,372



Balance Sheet	September 30, 2019
Operating lease right-of-use assets	$	52,342

Current maturities of operating lease liabilities	$	10,529
Operating lease liabilities, net of current portion	59,460
Total lease liabilities	$	69,989



Lease Cost	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	3,036		$	9,092
Short-term leases ⁽¹⁾	88			263
Variable lease costs	995			3,154
Sublease income	(648		)	(2,075		)
Net lease cost ^(2)(3)(4)	$	3,471		$	10,434


(1)	Includes variable lease costs related to short-term leases.


(2)	Net lease cost includes $0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively, recorded as restructuring charges as they relate to vacated office spaces. See Note 9 "Restructuring Charges" for additional information on our vacated office spaces.


(4)	Rent expense, including operating expenses, real estate taxes and insurance, recorded under ASC 840 for the three and nine months ended September 30, 2018 was $3.7 million and $11.3 million, respectively.


(1)	The expected lease payments as of December 31, 2018 represent our future minimum rental commitments as defined by ASC 840.


(2)	As of December 31, 2018, the expected total future minimum sublease income to be received was $10.2 million.



Other Information	Nine Months Ended September 30, 2019
Cash paid for operating lease liabilities	$	10,504
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	3,628

Weighted average remaining lease term - operating leases	6.6 years
Weighted average discount rate - operating leases	4.7		%



	As of September 30,
	2019	2018
Unvested restricted stock awards	—	11
Convertible senior notes	3,129	3,129
Warrants related to the issuance of convertible senior notes	3,129	3,129
Total anti-dilutive securities	6,258	6,269



	September 30, 2019			December 31, 2018
1.25% convertible senior notes due 2019	$	250,000		$	242,617
Senior secured credit facility	50,000			50,000
Promissory note due 2024	3,982			4,368
Total long-term debt	$	303,982		$	296,985
Current maturities of long-term debt	(250,525		)	(243,132		)
Long-term debt, net of current portion	$	53,457		$	53,853



	September 30, 2017			December 31, 2016
1.25% convertible senior notes due 2019	$	230,834		$	224,065
Senior secured credit facility	139,000			68,000
Promissory note due 2024	4,991			—
Total long-term debt	$	374,825		$	292,065
Current maturities of debt⁽¹⁾	(497		)	—
Long-term debt, net of current portion	$	374,328		$	292,065


~~(1)~~	~~The current maturities of debt are included as a component of accrued expenses and other current liabilities on our consolidated balance sheets.~~



	Principal Payments of Long-Term Debt
2019	$	250,130
2020	$	529
2021	$	544
2022	$	559
2023	$	574
Thereafter	$	51,646


~~(1)~~	~~Included in additional paid-in capital on the consolidated balance sheet.~~



	Employee Costs			Office Space Reductions			Other			Total
Balance as of December 31, 2016	$	5,182		$	5,773		$	24		$	10,979
Additions ⁽¹⁾	2,889			2,445			110			5,444
Payments	(7,226		)	(2,047		)	5			(9,268		)
Adjustments⁽¹⁾	(117		)	(1,087		)	(78		)	(1,282		)
Non-cash items	(46		)	(119		)	(61		)	(226		)
Balance as of September 30, 2017	$	682		$	4,965		$	—		$	5,647


(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 ~~discontinued~~consolidated statements of operations.



	Fair Value (Derivative Asset and Liability)
Balance Sheet Location	September 30, 2019		December 31, 2018
Prepaid expenses and other current assets	$	—	$	302
Other non-current assets	$	—	$	451
Accrued expenses and other current liabilities	$	121	$	—
Deferred compensation and other liabilities	$	482	$	—



Level 1 Inputs		Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs		Quoted 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 Inputs		Unobservable inputs for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.