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Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-50976 
HURON CONSULTING GROUP INC.
(Exact name of registrant as specified in its charter)
 
Delaware 01-0666114
(State or other jurisdiction of
incorporation or organization)
 (IRS Employer
Identification Number)
550 West Van Buren Street
Chicago, Illinois
60607
(Address of principal executive offices)
(Zip Code)
(312) 583-8700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareHURNNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer
Non-accelerated FilerSmaller Reporting 
Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 27, 2021, 22,577,906 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.


Table of Contents



Huron Consulting Group Inc.
HURON CONSULTING GROUP INC.
INDEX
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



Table of Contents



PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited) 
March 31,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$21,623 $67,177 
Receivables from clients, net of allowances of $8,464 and $7,680, respectively
87,146 87,687 
Unbilled services, net of allowances of $2,969 and $2,603, respectively
77,080 53,959 
Income tax receivable4,403 5,121 
Prepaid expenses and other current assets14,964 16,569 
Total current assets205,216 230,513 
Property and equipment, net29,710 29,093 
Deferred income taxes, net5,303 4,191 
Long-term investments64,703 71,030 
Operating lease right-of-use assets38,207 39,360 
Other non-current assets62,819 62,068 
Intangible assets, net21,232 20,483 
Goodwill597,552 594,237 
Total assets$1,024,742 $1,050,975 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$8,156 $648 
Accrued expenses and other current liabilities16,302 14,874 
Accrued payroll and related benefits56,811 133,830 
Current maturities of long-term debt548 499 
Current maturities of operating lease liabilities9,671 8,771 
Deferred revenues18,686 28,247 
Total current liabilities110,174 186,869 
Non-current liabilities:
Deferred compensation and other liabilities43,947 45,361 
Accrued contingent consideration for business acquisitions1,812 1,770 
Long-term debt, net of current portion267,642 202,780 
Operating lease liabilities, net of current portion59,730 61,825 
Deferred income taxes, net434 428 
Total non-current liabilities373,565 312,164 
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 25,294,954 and 25,346,916 shares issued at March 31, 2021 and December 31, 2020, respectively
247 246 
Treasury stock, at cost, 2,422,227 and 2,584,119 shares at March 31, 2021 and December 31, 2020, respectively
(134,611)(129,886)
Additional paid-in capital445,711 454,512 
Retained earnings219,414 214,009 
Accumulated other comprehensive income10,242 13,061 
Total stockholders’ equity541,003 551,942 
Total liabilities and stockholders’ equity$1,024,742 $1,050,975 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited) 
Three Months Ended
March 31,
20212020
Revenues and reimbursable expenses:
Revenues$203,213 $222,619 
Reimbursable expenses1,934 19,303 
Total revenues and reimbursable expenses205,147 241,922 
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses):
Direct costs148,115 156,248 
Amortization of intangible assets and software development costs925 1,301 
Reimbursable expenses2,003 19,389 
Total direct costs and reimbursable expenses151,043 176,938 
Operating expenses and other losses (gains), net
Selling, general and administrative expenses39,766 43,446 
Restructuring charges628 1,609 
Litigation and other losses (gains)42 (150)
Depreciation and amortization5,428 6,114 
Goodwill impairment charges 59,816 
Total operating expenses and other losses (gains), net45,864 110,835 
Operating income (loss)8,240 (45,851)
Other income (expense), net:
Interest expense, net of interest income(1,719)(2,341)
Other income (expense), net420 (5,296)
Total other expense, net(1,299)(7,637)
Income (loss) from continuing operations before taxes6,941 (53,488)
Income tax expense (benefit)1,536 (11,215)
Net income (loss) from continuing operations5,405 (42,273)
Loss from discontinued operations, net of tax (35)
Net income (loss)$5,405 $(42,308)
Net earnings (loss) per basic share:
Net income (loss) from continuing operations$0.25 $(1.94)
Loss from discontinued operations, net of tax  
Net income (loss)$0.25 $(1.94)
Net earnings (loss) per diluted share:
Net income (loss) from continuing operations$0.24 $(1.94)
Loss from discontinued operations, net of tax  
Net income (loss)$0.24 $(1.94)
Weighted average shares used in calculating earnings (loss) per share:
Basic21,932 21,827 
Diluted22,341 21,827 
Comprehensive income (loss):
Net income (loss)$5,405 $(42,308)
Foreign currency translation adjustments, net of tax400 (779)
Unrealized loss on investment, net of tax(4,648)(258)
Unrealized gain (loss) on cash flow hedging instruments, net of tax1,429 (1,685)
Other comprehensive loss(2,819)(2,722)
Comprehensive income (loss)$2,586 $(45,030)
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
Three Months Ended March 31, 2021
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 202024,560,855 $246 (2,812,896)$(129,886)$454,512 $214,009 $13,061 $551,942 
Comprehensive income5,405 (2,819)2,586 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations376,731 4 90,100 3,778 (3,782) 
Exercise of stock options6,631 — 174 174 
Share-based compensation7,988 7,988 
Shares redeemed for employee tax withholdings(165,203)(8,503)(8,503)
Share repurchases(245,718)$(3)$(13,181)(13,184)
Balance at March 31, 202124,698,499 $247 (2,887,999)$(134,611)$445,711 $219,414 $10,242 $541,003 
Three Months Ended March 31, 2020
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 201924,603,308 $247 (2,763,302)$(128,348)$460,781 $237,849 $14,936 $585,465 
Comprehensive income(42,308)(2,722)(45,030)
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations250,544 2 102,467 7,115 (7,117) 
Exercise of stock options20,000 — 468 468 
Share-based compensation11,720 11,720 
Shares redeemed for employee tax withholdings(120,000)(7,133)(7,133)
Share repurchases(313,998)(3)(20,878)(20,881)
Balance at March 31, 202024,559,854 $246 (2,780,835)$(128,366)$444,974 $195,541 $12,214 $524,609 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20212020
Cash flows from operating activities:
Net income (loss)$5,405 $(42,308)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization6,567 7,415 
Non-cash lease expense1,693 1,938 
Share-based compensation5,625 8,504 
Amortization of debt discount and issuance costs198 198 
Goodwill impairment charges 59,816 
Allowances for doubtful accounts 21 
Deferred income taxes (14,016)
Loss on sale of business 102 
Change in fair value of contingent consideration liabilities42  
Changes in operating assets and liabilities, net of acquisition and divestiture:
(Increase) decrease in receivables from clients, net1,178 11,698 
(Increase) decrease in unbilled services, net(23,086)(9,138)
(Increase) decrease in current income tax receivable / payable, net573 2,332 
(Increase) decrease in other assets327 4,304 
Increase (decrease) in accounts payable and other liabilities2,566 (3,708)
Increase (decrease) in accrued payroll and related benefits(74,273)(84,910)
Increase (decrease) in deferred revenues(9,569)1,606 
Net cash used in operating activities(82,754)(56,146)
Cash flows from investing activities:
Purchases of property and equipment, net(637)(1,001)
Purchases of investment securities (13,000)
Investment in life insurance policies (1,472)
Purchases of businesses(6,000) 
Capitalization of internally developed software costs(1,400)(2,922)
Net cash used in investing activities(8,037)(18,395)
Cash flows from financing activities:
Proceeds from exercises of stock options174 468 
Shares redeemed for employee tax withholdings(8,503)(7,133)
Share repurchases(11,454)(22,115)
Proceeds from bank borrowings89,000 281,000 
Repayments of bank borrowings(24,135)(38,131)
Net cash provided by financing activities45,082 214,089 
Effect of exchange rate changes on cash155 (143)
Net increase (decrease) in cash and cash equivalents(45,554)139,405 
Cash and cash equivalents at beginning of the period67,177 11,604 
Cash and cash equivalents at end of the period$21,623 $151,009 
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Property and equipment expenditures and capitalized software included in accounts payable, accrued expenses and accrued payroll and related benefits$3,545 $3,716 
Share repurchases included in accounts payable$1,729 $ 
Deferred payment on business acquisition$1,000 $ 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)

1. Description of Business
Huron is a global consultancy that collaborates with clients to drive strategic growth, ignite innovation and navigate constant change. Through a combination of strategy, expertise and creativity, we help clients accelerate operational, digital and cultural transformation, enabling the change they need to own their future. By embracing diverse perspectives, encouraging new ideas and challenging the status quo, Huron creates sustainable results for the organizations it serves.
2. Basis of Presentation and Significant Accounting Policies
The accompanying unaudited consolidated financial statements reflect the financial position, results of operations, and cash flows as of and for the three months ended March 31, 2021 and 2020. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("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") 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, 2020 included in our Annual Report on Form 10-K. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.
During the first quarter of 2021, we identified an error on our previously reported Consolidated Balance Sheet as of December 31, 2020 related to the classification between receivables from clients, unbilled services, and deferred revenues. The Consolidated Balance Sheet as of December 31, 2020 presented herein has been revised to reflect the correction of this error. The results of this correction on the Consolidated Balance Sheet were a decrease in unbilled services of $7.2 million, an increase in receivables from clients of $0.7 million, and a decrease in deferred revenues of $6.5 million. This error had no impact on our Consolidated Statement of Operations and Other Comprehensive Income. This error had no impact on our Consolidated Statement of Cash Flows for the three months ended March 31, 2021 and 2020. The Company evaluated the materiality of this error from both quantitative and qualitative perspectives and concluded that the impact of the error was not material to the financial statements for the year ended December 31, 2020.
Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and related disclosures. The business and economic uncertainty resulting from the coronavirus (COVID-19) pandemic has made such estimates and assumptions more difficult to predict. Accordingly, actual results and outcomes could differ from those estimates.
3. New Accounting Pronouncements
Recently Adopted
In October 2020, the FASB issued ASU 2020-10, Codification Improvements. ASU 2020-10 situates all disclosure guidance within the appropriate disclosure section of the Codification and makes other improvements and technical corrections to the Codification. We adopted ASU 2020-10 effective January 1, 2021, which did not have any impact on our consolidated financial statements.


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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
4. Goodwill and Intangible Assets
The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2021.

Healthcare

Business
Advisory
EducationTotal
Balance as of December 31, 2020:
Goodwill$636,810 $308,935 $104,384 $1,050,129 
Accumulated impairment losses(208,081)(247,811) (455,892)
Goodwill, net as of December 31, 2020428,729 61,124 104,384 594,237 
Goodwill recorded in connection with a business acquisition (1)
 3,315  3,315 
Goodwill, net as of March 31, 2021$428,729 $64,439 $104,384 $597,552 
(1)On February 1, 2021, we completed the acquisition of Unico Solution, a data strategy and technology consulting firm focused on helping clients use their data to speed business transformation and accelerate cloud adoption. The results of operations of Unico Solution are included in our consolidated financial statements and results of operations of our Business Advisory segment from the date of acquisition. This acquisition is not significant to our consolidated financial statements.
First Quarter 2020 Goodwill Impairment Charges
The worldwide spread of the COVID-19 pandemic in the first quarter of 2020 has created significant volatility, uncertainty and disruption to
the global economy. From the onset of the COVID-19 pandemic, we closely monitored the impact it could have on all aspects of our
business, including how we expect it to negatively impact our clients, employees and business partners. While the COVID-19 pandemic did
not have a significant impact on our consolidated revenues in the first quarter of 2020, we expected it to have an unfavorable impact on
sales, increase uncertainty in the backlog and negatively impact full year 2020 results. The services provided by our Strategy and Innovation
and Life Sciences reporting units within our Business Advisory segment focus on strategic solutions for healthy, well-capitalized companies to
identify new growth opportunities, which may be considered by our clients to be more discretionary in nature, and the duration of the projects
within these practices are typically short-term. Therefore, at the onset of the COVID-19 pandemic in the U.S. and due to the uncertainty
caused by the pandemic, we were cautious about near-term results for these two reporting units. Based on our internal projections and the
preparation of our financial statements for the quarter ended March 31, 2020, and considering the expected decrease in demand due to the
COVID-19 pandemic, during the first quarter of 2020 we believed it was more likely than not that the fair value of these two reporting units no
longer exceeded their carrying values and performed an interim impairment test on both reporting units as of March 31, 2020.
Based on the estimated fair values of the Strategy and Innovation and Life Sciences reporting units, we recorded non-cash pretax goodwill impairment charges of $49.9 million and $9.9 million, respectively, in the first quarter of 2020. The $49.9 million non-cash pretax charge related to the Strategy and Innovation reporting unit reduced the goodwill balance of the reporting unit to $37.5 million. The $9.9 million non-cash pretax charge related to the Life Sciences reporting unit reduced the goodwill balance of the reporting unit to zero.
Our goodwill impairment test was performed by comparing the fair value of each of the Strategy and Innovation and Life Sciences reporting
units with its respective carrying value and recognizing an impairment charge for the amount by which the carrying value exceeded the fair value. To estimate the fair value of each reporting unit, we relied on a combination of the income approach and the market approach with a
fifty-fifty weighting.
In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected after-tax cash flows that will be
generated by each reporting unit and then discounting those cash flows to present value, reflecting the relevant risks associated with each
reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted
revenue growth rates, forecasted EBITDA margins, and discount rates that reflect the risk inherent in the future cash flows. In estimating
future cash flows, we relied on internally generated seven-year forecasts. Our forecasts are based on historical experience, current backlog,
expected market demand, and other industry information.
In the market approach, we utilized the guideline company method, which involved calculating revenue multiples based on operating data
from guideline publicly traded companies. Multiples derived from guideline companies provide an indication of how much a knowledgeable
investor in the marketplace would be willing to pay for a company. These multiples were evaluated and adjusted based on specific
characteristics of the Strategy and Innovation and Life Sciences reporting units relative to the selected guideline companies and applied to
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
the reporting units' operating data to arrive at an indication of value.
Intangible Assets
Intangible assets as of March 31, 2021 and December 31, 2020 consisted of the following:
As of March 31, 2021As of December 31, 2020
Useful Life 
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Customer relationships
3 to 13
$77,030 $58,574 $73,629 $56,232 
Trade names66,000 4,406 6,130 4,287 
Non-competition agreements52,210 1,560 2,090 1,541 
Technology and software55,800 5,474 5,800 5,380 
Customer contracts2800 594 800 526 
Total$91,840 $70,608 $88,449 $67,966 
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships and customer contracts, as well as certain trade names and technology and software, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis.
Intangible asset amortization expense was $2.4 million and $3.2 million for the three months ended March 31, 2021 and 2020, respectively. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of March 31, 2021.
Year Ending December 31,Estimated Amortization Expense
2021$9,059 
2022$6,878 
2023$4,231 
2024$1,384 
2025$566 
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.
5. Revenues
For the three months ended March 31, 2021 and 2020, we recognized revenues of $203.2 million and $222.6 million, respectively. Of the $203.2 million recognized in the first quarter of 2021, we recognized revenues of $4.8 million from obligations satisfied, or partially satisfied, in prior periods, of which $2.5 million was primarily due to the release of allowances on unbilled services as a result of securing contract amendments and $2.3 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $222.6 million recognized in the first quarter of 2020, we recognized revenues of $7.9 million from obligations satisfied, or partially satisfied, in prior periods, of which $4.8 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $3.1 million was primarily due to the release of allowances on unbilled services as a result of securing contract amendments.
As of March 31, 2021, we had $61.0 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude obligations under contracts with an original expected duration of one year or less, variable consideration which has been excluded from the total transaction price due to the constraint, and performance obligations under time-and-expense engagements which are recognized in the amount invoiced. Of the $61.0 million of performance obligations, we expect to recognize approximately $34.8 million as revenue in 2021, $13.9 million in 2022, and the remaining $12.3 million thereafter. Actual revenue recognition could differ from these amounts as a result of changes in the estimated timing of work to be performed, adjustments to estimated variable consideration in performance-based arrangements, or other factors.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Contract Assets and Liabilities
The payment terms and conditions in our customer contracts vary. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the consolidated balance sheets.
Unbilled services include revenues recognized for services performed but not yet billed to clients. Services performed that we are not yet entitled to bill because certain events, such as the completion of the measurement period or client approval in performance-based engagements, must occur are recorded as contract assets and included within unbilled services, net. The contract asset balance as of March 31, 2021 and December 31, 2020 was $16.7 million and $17.3 million, respectively. The $0.6 million decrease primarily reflects timing differences between the completion of our performance obligations and the amounts billed or billable to clients in accordance with their contractual billing terms.
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 March 31, 2021 and December 31, 2020, was $18.7 million and $28.2 million, respectively. The $9.5 million decrease primarily reflects timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the three months ended March 31, 2021, $20.8 million of revenues recognized were included in the deferred revenue balance as of December 31, 2020.
6. Earnings Per Share
Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, excluding unvested restricted common stock. Diluted earnings per share reflects the potential reduction in earnings per share that could occur if securities or other contracts to issue common stock were exercised or converted into common stock under the treasury stock method. Such securities or other contracts include unvested restricted stock awards, unvested restricted stock units, outstanding common stock options, convertible senior notes, and outstanding warrants, to the extent dilutive. In periods for which we report a net loss from continuing operations, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss from continuing operations per share would be anti-dilutive.
Earnings (loss) per share under the basic and diluted computations are as follows: 
 Three Months Ended
March 31,
 20212020
Net income (loss) from continuing operations$5,405 $(42,273)
Loss from discontinued operations, net of tax (35)
Net income (loss)$5,405 $(42,308)
Weighted average common shares outstanding – basic21,932 21,827 
Weighted average common stock equivalents409  
Weighted average common shares outstanding – diluted22,341 21,827 
Net earnings (loss) per basic share:
Net income (loss) from continuing operations$0.25 $(1.94)
Loss from discontinued operations, net of tax  
Net income (loss)$0.25 $(1.94)
Net earnings (loss) per diluted share:
Net income (loss) from continuing operations$0.24 $(1.94)
Loss from discontinued operations, net of tax  
Net income (loss)$0.24 $(1.94)
The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were as follows:
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
 As of March 31,
 20212020
Unvested restricted stock awards21 992 
Outstanding common stock options59 86 
Warrants related to the issuance of convertible senior notes 3,129 
Total anti-dilutive securities80 4,207 
See Note 7 “Financing Arrangements” for further information on the convertible senior notes and warrants related to the issuance of convertible notes.
In November 2020, our board of directors authorized a share repurchase program (the “2020 Share Repurchase Program”) permitting us to
repurchase up to $50 million of our common stock through December 31, 2021. The 2020 Share Repurchase Program was authorized
subsequent to the expiration of our prior share repurchase program (the “2015 Share Repurchase Program”) on October 31, 2020. The 2015
Share Repurchase Program permitted us to repurchase up to $125 million of our common stock through October 31, 2020. The amount and
timing of repurchases under both share repurchase programs were and will continue to be determined by management and 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.
Under the 2020 Share Repurchase Program, we repurchased and retired 245,718 shares for $13.2 million in the first quarter of 2021 of which $1.7 million settled in the second quarter of 2021. The 245,718 shares repurchased and retired were reflected as a reduction to our basic weighted average shares outstanding for the quarter ended March 31, 2021 based on the trade date of the share repurchase. As of March 31, 2021, $31.8 million remained available for share repurchases.

7. Financing Arrangements
A summary of the carrying amounts of our debt follows:
March 31,
2021
December 31,
2020
Senior secured credit facility$265,000 $200,000 
Promissory note due 20243,190 3,279 
Total long-term debt$268,190 $203,279 
Current maturities of long-term debt(548)(499)
Long-term debt, net of current portion$267,642 $202,780 
Below is a summary of the scheduled remaining principal payments of our debt as of March 31, 2021.
Principal Payments of Long-Term Debt
2021$410 
2022$559 
2023$575 
2024$266,646 
Senior Secured Credit Facility
The Company has a $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 Agreement"), that becomes due and payable in full upon maturity on 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 $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 $750 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
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 1.125% per annum and 1.875% per annum, in the case of LIBOR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time.
Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances, including upon an Event of Default (as defined in the Amended Credit Agreement). In addition, we have the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The loans and obligations under the Amended Credit Agreement are secured pursuant to a Second Amended and Restated Security Agreement and a Second Amended and Restated Pledge Agreement (the “Pledge Agreement”) with Bank of America, N.A. as collateral agent, pursuant to which the Company and the subsidiary guarantors grant Bank of America, N.A., for the ratable benefit of the lenders under the Amended Credit Agreement, a first-priority lien, subject to permitted liens, on substantially all of the personal property assets of the Company and the subsidiary guarantors, and a pledge of 100% of the stock or other equity interests in all domestic subsidiaries and 65% of the stock or other equity interests in each “material first-tier foreign subsidiary” (as defined in the Pledge Agreement).
The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) of 3.75 to 1.00; however the maximum permitted Consolidated Leverage Ratio will increase to 4.00 to 1.00 upon the 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 covenants is calculated on a continuing operations basis and includes adjustments to add back non-cash goodwill impairment charges, share-based compensation costs, certain non-cash restructuring charges, pro forma historical EBITDA for businesses acquired, and other specified items in accordance with the Amended Credit Agreement. For purposes of the Consolidated Leverage Ratio, total debt is on a gross basis and is not netted against our cash balances. At March 31, 2021, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 2.64 to 1.00 and a Consolidated Interest Coverage Ratio of 13.00 to 1.00.
Borrowings outstanding under the Amended Credit Agreement at March 31, 2021 totaled $265.0 million. These borrowings carried a weighted average interest rate of 2.4%, including the effect of the interest rate swaps described in Note 9 “Derivative Instruments and Hedging Activity." Borrowings outstanding under the Amended Credit Agreement at December 31, 2020 were $200.0 million and carried a weighted average interest rate of 2.5%, including the effect of the interest rate swaps outstanding at the time and described in Note 9 “Derivative Instruments and Hedging Activity." 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 March 31, 2021, we had outstanding letters of credit totaling $0.8 million, which are primarily used as security deposits for our office facilities. As of March 31, 2021, the unused borrowing capacity under the revolving credit facility was $334.2 million.
Promissory Note due 2024
On June 30, 2017, in conjunction with our purchase of an aircraft related to the acquisition of Innosight, we assumed, from the sellers of the aircraft, a promissory note with an outstanding principal balance of $5.1 million. The principal balance of the promissory note is subject to scheduled monthly principal payments until the maturity date of March 1, 2024, at which time a final payment of $1.5 million, plus any accrued and unpaid interest, will be due. Under the terms of the promissory note, we pay interest on the outstanding principal amount at a rate of one month LIBOR plus 1.97% per annum. The obligations under the promissory note are secured pursuant to a Loan and Aircraft Security Agreement with Banc of America Leasing & Capital, LLC, which grants the lender a first priority security interest in the aircraft. At March 31, 2021, the outstanding principal amount of the promissory note was $3.2 million, and the aircraft had a carrying amount of $4.3 million. At December 31, 2020, the outstanding principal amount of the promissory note was $3.3 million, and the aircraft had a carrying amount of $4.4 million.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
8. Restructuring Charges
Restructuring charges for the three months ended March 31, 2021 were $0.6 million compared to $1.6 million, for the three months ended March 31, 2020.
The $0.6 million restructuring charge recognized in the first quarter of 2021 primarily related to rent and related expenses, net of sublease income, and accelerated depreciation on furniture and fixtures for vacated office spaces.
The $1.6 million restructuring charge recognized in the first quarter of 2020 included a $1.2 million accrual for the termination of a third-party advisor agreement, $0.3 million related to workforce reductions to better align resources with market demand, and $0.1 million related to workforce reductions in our corporate operations.
In the fourth quarter of 2020, we announced a restructuring plan to reduce operating costs to address the impact of the COVID-19 pandemic on our business. The restructuring plan, which was substantially complete in the fourth quarter of 2020, provided for a reduction in certain leased office spaces and a reduction in workforce.
The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the three months ended March 31, 2021.
Employee CostsOffice Space ReductionsOther Total
Balance as of December 31, 2020$2,447 $84 $893 $3,424 
Additions4   4 
Payments(2,382)(39)(167)(2,588)
Adjustments
10   10 
Balance as of March 31, 2021$79 $45 $726 $850 
The restructuring charge liability related to employee costs at March 31, 2021 is expected to be paid in the next 12 months and is included as a component of accrued payroll and related benefits. The employee related payments made in the first quarter of 2021 primarily related to the fourth quarter 2020 restructuring plan. The restructuring charge liability related to office space reductions at March 31, 2021 is included as a component of accrued expenses and other current liabilities. The $0.7 million other restructuring charge liability at March 31, 2021 is related to the termination of a third-party advisor agreement and is expected to be paid over the next 22 months and is included as a component of accrued expenses and other current liabilities and deferred compensation and other liabilities.
9. Derivative Instruments and Hedging Activity
On June 22, 2017, we entered into a forward interest rate swap agreement effective August 31, 2017 and ending August 31, 2022, with a notional amount of $50.0 million. We entered into this derivative instrument to hedge against the interest rate risks of our variable-rate borrowings. Under the terms of the interest rate swap agreement, we receive from the counterparty interest on the notional amount based on one month LIBOR and we pay to the counterparty a fixed rate of 1.900%.
On January 30, 2020, we entered into a forward interest rate swap agreement effective December 31, 2019 and ending December 31, 2024, with a notional amount of $50.0 million. We entered into this derivative instrument to further 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 1.500%.
On March 16, 2020, we entered into a forward interest rate swap agreement effective February 28, 2020 and ending February 28, 2025, with a notional amount of $100.0 million. We entered into this derivative instrument to further 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 0.885%.
We recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet. We have designated these derivative instruments as cash flow hedges. Therefore, changes in the fair value of the derivative instruments are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified into interest expense upon settlement. As of March 31, 2021, it was anticipated that $1.7 million of the losses, net of tax, currently recorded in accumulated other comprehensive income will be reclassified into earnings within the next 12 months.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth additional information relating to the interest rate swaps designated as a cash flow hedging instrument as of March 31, 2021 and December 31, 2020.
 Fair Value (Derivative Asset and Liability)
Balance Sheet LocationMarch 31,
2021
December 31,
2020
Accrued expenses and other current liabilities$2,168 $2,100 
Deferred compensation and other liabilities$1,260 $3,297 
All of our derivative instruments are transacted under the International Swaps and Derivatives Association (ISDA) master agreements. These agreements permit the net settlement of amounts owed in the event of default and certain other termination events. Although netting is permitted, it is our policy to record all derivative assets and liabilities on a gross basis on our consolidated balance sheet.
We do not use derivative instruments for trading or other speculative purposes. Refer to Note 11 “Other Comprehensive Income (Loss)” for additional information on our derivative instruments.
10. Fair Value of Financial Instruments
Certain of our assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used in measuring fair value and requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three levels based on the objectivity of the inputs as follows:
Level 1 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 InputsQuoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 InputsUnobservable inputs for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020.
Level 1Level 2Level 3Total
March 31, 2021
Assets:
Convertible debt investment$ $ $58,036 $58,036 
Deferred compensation assets 34,881  34,881 
Total assets$ $34,881 $58,036 $92,917 
Liabilities:
Interest rate swaps$ $3,428 $ $3,428 
Contingent consideration for business acquisition  1,812 1,812 
Total liabilities$ $3,428 $1,812 $5,240 
December 31, 2020
Assets:
Convertible debt investment$ $ $64,364 $64,364 
Deferred compensation assets 34,056  34,056 
Total assets$ $34,056 $64,364 $98,420 
Liabilities:
Interest rate swaps$ $5,397 $ $5,397 
Contingent consideration for business acquisition  1,770 $1,770 
Total liabilities$ $5,397 $1,770 $7,167 
Interest rate swaps: The fair values of our interest rate swaps were derived using estimates to settle the interest rate swap agreements, which are based on the net present value of expected future cash flows on each leg of the swaps utilizing market-based inputs and a discount rate reflecting the risks involved.
Convertible debt investment: In 2014 and 2015, we invested $27.9 million, in the form of zero coupon convertible debt (the "initial convertible
notes"), in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight, a U.S.-based company that partners with leading nonprofit universities to increase access to and retention of international students, boost institutional growth, and enhance an institution’s global footprint. In the first quarter of 2020, we invested an additional $13.0 million, in the form of 1.69% convertible debt with a
senior liquidation preference to the initial convertible notes (the "additional convertible note") and amended our initial convertible notes to
extend the maturity date to January 17, 2024, which coincides with the maturity date of the additional convertible note.
To determine the appropriate accounting treatment for our 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 investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive
income. We estimate the fair value of our investment using a scenario-based approach in the form of a hybrid analysis that consists of a Monte Carlo simulation model and an expected return analysis. The conclusion of value for our investment is based on the probability weighted assessment of both scenarios. The hybrid analysis utilizes certain assumptions including the assumed holding period through the maturity date of January 17, 2024, the applicable waterfall distribution at the end of the expected holding period based on the rights and privileges of the various instruments, cash flow projections discounted at the risk-adjusted rate of 22.5%, and the concluded equity volatility of 45.0%, 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 investments on our consolidated balance sheets.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth the changes in the balance of the convertible debt investment for the three months ended March 31, 2021.
Convertible Debt Investment
Balance as of December 31, 2020$64,364 
Change in fair value of convertible debt investment(6,328)
Balance as of March 31, 2021$58,036 
Deferred compensation assets: We have a non-qualified deferred compensation plan (the "Plan") for the members of our board of directors and a select group of our employees. The deferred compensation liability is funded by the Plan assets, which consist of life insurance policies maintained within a trust. The cash surrender value of the life insurance policies approximates fair value and is based on third-party broker statements which provide the fair value of the life insurance policies' underlying investments, which are Level 2 inputs. The cash surrender value of the life insurance policies is invested primarily in mutual funds. The Plan assets are included in other non-current assets on our consolidated balance sheets. Realized and unrealized gains (losses) from the deferred compensation assets are recorded to other income (expense), net in our consolidated statements of operations.
Contingent consideration for business acquisition: We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted assessment of the specific financial performance targets being measured or a Monte Carlo simulation model, as appropriate. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 inputs. The significant unobservable inputs used in the fair value measurements of our contingent consideration are our measures of the estimated payouts based on internally generated financial projections on a probability-weighted basis and a discount rate which typically reflects a risk-free rate, and was 2.41% as of March 31, 2021 and December 31, 2020. The fair value of the contingent consideration is reassessed quarterly based on assumptions used in our latest projections and input provided by practice leaders and management. Any change in the fair value estimate is recorded in our consolidated statement of operations for that period. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of our contingent consideration liability, which would result in different impacts to our consolidated balance sheets and consolidated statements of operations. Actual results may differ from our estimates.
The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the three months ended March 31, 2021.
Contingent Consideration for Business Acquisitions
Balance as of December 31, 2020
1,770 
Remeasurement of contingent consideration for business acquisitions42 
Balance as of March 31, 2021
$1,812 
Financial assets and liabilities not recorded at fair value are as follows:
Preferred Stock Investment
In the fourth quarter of 2019, we invested $5.0 million, in the form of preferred stock, in Medically Home Group, Inc. ("Medically Home"), a healthcare technology-enabled services company. To determine the appropriate accounting treatment for our investment, we performed a VIE analysis and concluded that Medically Home does not meet the definition of a VIE. We also reviewed the characteristics of our investment to confirm that the preferred stock is not in-substance common stock that would warrant equity method accounting. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment for our investment in Medically Home to be that of an equity security with no readily determinable fair value. We elected to apply the measurement alternative at the time of the purchase and will continue to do so until the investment does not qualify to be so measured. Under the measurement alternative, the investment is carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment in Medically Home. On a quarterly basis, we review the information available to determine whether an orderly and observable transaction for the same or similar equity instrument occurred, and remeasure the fair value of the preferred stock using such identified transactions, with changes in the fair value recorded in consolidated statement of operations. As of March 31, 2021, the carrying amount of our preferred stock investment was $6.7 million.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Senior Secured Credit Facility
The carrying value of our borrowings outstanding under our senior secured credit facility is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the senior secured credit facility bears interest at variable rates based on current market rates as set forth in the Amended Credit Agreement. Refer to Note 7 “Financing Arrangements” for additional information on our senior secured credit facility.
Promissory Note due 2024
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 7 “Financing Arrangements” for additional information on our promissory note due 2024.
Cash and Cash Equivalents and Other Financial Instruments
Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values of all other financial instruments not described above reasonably approximate fair market value due to the nature of the financial instruments and the short-term maturity of these items.
11. Other Comprehensive Income (Loss)
The table below sets forth the components of other comprehensive income (loss), net of tax, for the three months ended March 31, 2021 and 2020.
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Other comprehensive income (loss):
Foreign currency translation adjustments$400 $ $400 $(779)$ $(779)
Unrealized gain (loss) on investment$(6,328)$1,680 $(4,648)$(348)$90 $(258)
Unrealized gain (loss) on cash flow hedges:
Change in fair value$1,189 $(337)$852 $(2,272)$590 $(1,682)
Reclassification adjustments into earnings780 (203)577 (4)1 (3)
Net unrealized gain (loss)$1,969 $(540)$1,429 $(2,276)$591 $(1,685)
Other comprehensive income (loss)$(3,959)$1,140 $(2,819)$(3,403)$681 $(2,722)
The before tax amounts reclassified from accumulated other comprehensive income related to our cash flow hedges are recorded to interest expense, net of interest income.
Accumulated other comprehensive income, net of tax, includes the following components: 
Foreign Currency
Translation
Available-for-Sale InvestmentCash Flow HedgesTotal
Balance, December 31, 2020$(218)$17,205 $(3,926)$13,061 
Current period change400 (4,648)1,429