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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 June 30, 2022
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 July 21, 2022, 20,784,210 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) 
June 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$11,958 $20,781 
Receivables from clients, net of allowances of $8,115 and $8,827, respectively
150,973 122,316 
Unbilled services, net of allowances of $3,493 and $2,637, respectively
118,825 91,285 
Income tax receivable677 8,071 
Prepaid expenses and other current assets21,279 15,229 
Total current assets303,712 257,682 
Property and equipment, net27,214 31,004 
Deferred income taxes, net1,775 1,804 
Long-term investments96,982 72,584 
Operating lease right-of-use assets32,018 35,311 
Other non-current assets64,096 68,191 
Intangible assets, net28,271 31,894 
Goodwill623,841 620,879 
Total assets$1,177,909 $1,119,349 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$10,983 $13,621 
Accrued expenses and other current liabilities25,549 22,519 
Accrued payroll and related benefits92,738 139,131 
Current maturities of long-term debt 559 
Current maturities of operating lease liabilities10,241 10,142 
Deferred revenues18,969 19,212 
Total current liabilities158,480 205,184 
Non-current liabilities:
Deferred compensation and other liabilities32,370 43,458 
Long-term debt, net of current portion342,000 232,221 
Operating lease liabilities, net of current portion49,093 54,313 
Deferred income taxes, net20,607 12,273 
Total non-current liabilities444,070 342,265 
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 23,492,632 and 24,364,814 shares issued, respectively
232 239 
Treasury stock, at cost, 2,681,730 and 2,495,172 shares, respectively
(136,425)(135,969)
Additional paid-in capital374,280 413,794 
Retained earnings317,723 276,996 
Accumulated other comprehensive income19,549 16,840 
Total stockholders’ equity575,359 571,900 
Total liabilities and stockholders’ equity$1,177,909 $1,119,349 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited) 
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenues and reimbursable expenses:
Revenues$273,325 $230,126 $533,374 $433,339 
Reimbursable expenses7,492 3,252 12,218 5,186 
Total revenues and reimbursable expenses280,817 233,378 545,592 438,525 
Operating expenses:
Direct costs (exclusive of depreciation and amortization included below) 189,233 161,526 376,480 309,641 
Reimbursable expenses7,576 3,316 12,332 5,319 
Selling, general and administrative expenses46,033 45,190 94,428 84,998 
Restructuring charges2,069 861 3,624 1,489 
Depreciation and amortization6,902 6,356 13,766 12,709 
Total operating expenses251,813 217,249 500,630 414,156 
Operating income 29,004 16,129 44,962 24,369 
Other income (expense), net:
Interest expense, net of interest income(2,446)(2,029)(4,642)(3,748)
Other income (expense), net(4,881)2,151 19,484 2,571 
Total other income (expense), net(7,327)122 14,842 (1,177)
Income before taxes21,677 16,251 59,804 23,192 
Income tax expense 7,802 3,454 19,077 4,990 
Net income $13,875 $12,797 $40,727 $18,202 
Earnings per share:
Net income per basic share$0.67 $0.59 $1.97 $0.84 
Net income per diluted share$0.66 $0.59 $1.94 $0.82 
Weighted average shares used in calculating earnings per share:
Basic20,582 21,555 20,715 21,743 
Diluted20,967 21,871 21,047 22,105 
Comprehensive income (loss):
Net income $13,875 $12,797 $40,727 $18,202 
Foreign currency translation adjustments, net of tax(656)82 (699)482 
Unrealized gain (loss) on investment, net of tax773 1,422 (1,888)(3,226)
Unrealized gain on cash flow hedging instruments, net of tax971 218 5,296 1,647 
Other comprehensive income (loss)1,088 1,722 2,709 (1,097)
Comprehensive income $14,963 $14,519 $43,436 $17,105 
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 June 30,
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at March 31, 202223,639,953 $237 (2,918,100)$(135,367)$395,103 $303,848 $18,461 $582,282 
Comprehensive income13,875 1,088 14,963 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations27,309  (15,115)(931)931  
Exercise of stock options13,731 — 538 538 
Share-based compensation6,049 6,049 
Shares redeemed for employee tax withholdings(2,584)(127)(127)
Share repurchases(497,547)(5)(28,341)(28,346)
Balance at June 30, 202223,183,446 $232 (2,935,799)$(136,425)$374,280 $317,723 $19,549 $575,359 
Balance at March 31, 202124,698,499 $247 (2,887,999)$(134,611)$445,711 $219,414 $10,242 541,003 
Comprehensive income12,797 1,722 14,519 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations21,820  (9,091)(605)605  
Exercise of stock options6,772 — 248 248 
Share-based compensation4,575 4,575 
Shares redeemed for employee tax withholdings(2,843)(148)(148)
Share repurchases(405,363)(4)(22,055)(22,059)
Balance at June 30, 202124,321,728 $243 (2,899,933)$(135,364)$429,084 $232,211 $11,964 $538,138 
Six Months Ended June 30,
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 202123,868,918 $239 (2,908,849)$(135,969)$413,794 $276,996 $16,840 $571,900 
Comprehensive income40,727 2,709 43,436 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations304,938 3 115,125 6,555 (6,558) 
Exercise of stock options30,536 — 1,185 1,185 
Share-based compensation18,100 18,100 
Shares redeemed for employee tax withholdings(142,075)(7,011)(7,011)
Share repurchases(1,020,946)(10)(52,241)(52,251)
Balance at June 30, 202223,183,446 $232 (2,935,799)$(136,425)$374,280 $317,723 $19,549 $575,359 
Balance at December 31, 202024,560,855 $246 (2,812,896)$(129,886)$454,512 $214,009 $13,061 $551,942 
Comprehensive loss18,202 (1,097)17,105 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations398,551 4 81,009 3,173 (3,177) 
Exercise of stock options13,403 — 422 422 
Share-based compensation12,563 12,563 
Shares redeemed for employee tax withholdings(168,046)(8,651)(8,651)
Share repurchases(651,081)(7)(35,236)(35,243)
Balance at June 30, 202124,321,728 $243 (2,899,933)$(135,364)$429,084 $232,211 $11,964 $538,138 
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)
Six Months Ended
June 30,
20222021
Cash flows from operating activities:
Net income$40,727 $18,202 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization13,766 12,923 
Non-cash lease expense3,174 3,301 
Share-based compensation15,166 11,566 
Amortization of debt discount and issuance costs397 397 
Allowances for doubtful accounts47  
Deferred income taxes7,089 (48)
Gain on sale of property and equipment, excluding transaction costs(1,117)(158)
Change in fair value of contingent consideration liabilities33 42 
Change in fair value of preferred stock investment(26,964) 
Other, net (78)
Changes in operating assets and liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from clients, net(28,825)(27,749)
(Increase) decrease in unbilled services, net(28,329)(36,088)
(Increase) decrease in current income tax receivable / payable, net9,394 3,366 
(Increase) decrease in other assets3,984 (1,117)
Increase (decrease) in accounts payable and other liabilities(13,524)5,038 
Increase (decrease) in accrued payroll and related benefits(43,420)(42,487)
Increase (decrease) in deferred revenues(1,834)(9,080)
Net cash used in operating activities(50,236)(61,970)
Cash flows from investing activities:
Purchases of property and equipment(6,800)(5,439)
Investment in life insurance policies (77)
Purchases of business, net of cash acquired(1,948)(5,886)
Capitalization of internally developed software costs(3,974)(2,508)
Proceeds from note receivable157  
Proceeds from sale of property and equipment4,750 158 
Divestiture of business207  
Net cash used in investing activities(7,608)(13,752)
Cash flows from financing activities:
Proceeds from exercises of stock options1,185 422 
Shares redeemed for employee tax withholdings(7,011)(8,651)
Share repurchases(52,443)(35,243)
Proceeds from bank borrowings224,000 139,000 
Repayments of bank borrowings(114,780)(74,270)
Deferred payments on business acquisitions(1,875) 
Net cash provided by financing activities49,076 21,258 
Effect of exchange rate changes on cash(55)269 
Net decrease in cash and cash equivalents(8,823)(54,195)
Cash and cash equivalents at beginning of the period20,781 67,177 
Cash and cash equivalents at end of the period$11,958 $12,982 
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$3,134 $3,315 
Operating lease right-of-use asset obtained in exchange for operating lease liability$102 $ 
Contingent consideration related to purchase of business$869 $ 
    
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 professional services firm that creates innovative strategies, optimizes operations and accelerates digital transformation using an enterprise portfolio of technology, data and analytics solutions to empower clients to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
We provide our services and manage our business under three operating segments: Healthcare, Education and Commercial. See Note 14 “Segment Information” for a discussion of our three segments.
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. The new operating model will strengthen Huron’s go-to-market strategy, drive efficiencies that support margin expansion, and position the company to accelerate growth.
To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital. These changes create greater transparency for investors by improving visibility into the core drivers of our business.
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 and six months ended June 30, 2022 and 2021. 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 included in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the period ended March 31, 2022. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.
In order to better align with industry standards, in the first quarter of 2022, we revised the presentation of our consolidated statement of operations and other comprehensive income (loss) to present depreciation and amortization expense inclusive of amortization of intangible assets and software development costs previously presented within total direct costs and reimbursable expenses. We also aggregated immaterial line items within selling, general and administrative expenses. The change in presentation has no effect on our consolidated results, and our historical consolidated statements of operations and other comprehensive income (loss) were revised for consistent presentation.
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
Not Yet Adopted
In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform (Topic 848): Scope. Together, these ASUs provide optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of,
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
reference rate reform on financial reporting under GAAP. This standard is optional and may be applied by entities after March 12, 2020, but no later than December 31, 2022. Our senior secured credit facility and related interest rate swaps are indexed to LIBOR; as such, we are currently evaluating the potential impact this guidance will have on our consolidated financial statements.
4. Goodwill and Intangible Assets
The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2022.

Healthcare
Education
Commercial(1)
Total
Balance as of December 31, 2021:
Goodwill$642,951 $121,570 $312,250 $1,076,771 
Accumulated impairment losses(208,081) (247,811)(455,892)
Goodwill, net as of December 31, 2021434,870 121,570 64,439 620,879 
Goodwill reallocation(1)
18,057 (1,417)(16,640) 
Goodwill recorded in connection with business acquisitions (2)(3)
162 2,082 718 2,962 
Goodwill, net as of June 30, 2022$453,089 $122,235 $48,517 $623,841 
(1)The goodwill balance as of December 31, 2021 shown within the Commercial segment related to our Business Advisory segment prior to the modification of our operating model. Effective January 1, 2022, we reallocated a portion of the goodwill within our Business Advisory segment to our Healthcare and Education segments. The remaining goodwill was allocated to our new Commercial segment.
(2)On January 18, 2022, we completed the acquisition of AIMDATA, LLC ("AIMDATA"), an advisory and implementation consulting services firm focused on strategy, technology and business transformation. The results of operations of AIMDATA are included within our consolidated financial statements as of the acquisition date and allocated among our three operating industries, which are our reportable segments, based on the engagements delivered by the business. The acquisition of AIMDATA is not significant to our consolidated financial statements.
(3)In the first quarter of 2022, we finalized the measurement of assets acquired, including goodwill, and liabilities assumed in the acquisition of Whiteboard Communications Ltd. ("Whiteboard"), a student enrollment advisory firm that helps colleges and universities with recruitment initiatives and financial aid strategies that we acquired in December 2021. The results of operations of Whiteboard are included in our consolidated financial statements and results of operations of our Education segment from the date of acquisition.
First Quarter 2022 Goodwill Reallocation
Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities. To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments: Healthcare, Education and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries. The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The three reportable segments of Healthcare, Education and Commercial are also our reporting units for goodwill impairment testing purposes. As a result of the reorganization, we reallocated the goodwill balances of our historical reporting units to our new reporting units based on the relative estimated fair values of each component of the historical reporting units to be allocated to the new reporting units. Additionally, we performed a goodwill impairment test on the goodwill balances of each of our reporting units as of January 1, 2022 by comparing the fair value of the reporting unit to its carrying value, including the reallocated goodwill. Based on the results of the goodwill impairment test, we determined the fair values of the Healthcare, Education, and Commercial reporting units exceeded their carrying values by 37%, 199%, and 105%, respectively. As such, we concluded that there was no indication of goodwill impairment for all three reporting units as of January 1, 2022.
We relied on the income approach to estimate the fair value of the reporting units for both the goodwill reallocation and the goodwill impairment test. The income approach utilized a discounted cash flow analysis, which involved estimating the expected after-tax cash flows that will be generated by each business and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted EBITDA margins, and discount rates that reflect the risk inherent in the future cash flows. In estimating future cash flows, we relied on internally generated ten-year forecasts. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.
Intangible Assets
Intangible assets as of June 30, 2022 and December 31, 2021 consisted of the following:
As of June 30, 2022As of December 31, 2021
Useful Life 
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Customer relationships
3 to 13
$77,763 $57,261 $75,908 $53,421 
Trade names66,000 5,527 6,000 5,148 
Technology and software
2 to 5
13,330 6,791 13,330 5,607 
Non-competition agreements
2 to 5
920 216 2,020 1,347 
Customer contracts1260 207 260 101 
Total$98,273 $70,002 $97,518 $65,624 
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships and customer contracts, as well as certain trade names and technology and software, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis.
Intangible asset amortization expense was $2.8 million and $2.3 million for the three months ended June 30, 2022 and 2021, respectively; and $5.7 million and $4.7 million for the six months ended June 30, 2022 and 2021. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of June 30, 2022.
Year Ending December 31,Estimated Amortization Expense
2022$11,198 
2023$7,904 
2024$4,514 
2025$3,386 
2026$2,435 
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
5. Revenues
For the three months ended June 30, 2022 and 2021, we recognized revenues of $273.3 million and $230.1 million, respectively. Of the $273.3 million recognized in the second quarter of 2022, we recognized revenues of $5.1 million from obligations satisfied, or partially satisfied, in prior periods, of which $3.7 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements, and $1.4 million was primarily due to the release of allowances on receivables from clients and unbilled services. Of the $230.1 million recognized in the second quarter of 2021, we recognized revenues of $15.7 million from obligations satisfied, or partially satisfied, in prior periods, of which $13.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements, and $2.2 million was primarily due to the release of allowances on receivables from clients and unbilled services.
For the six months ended June 30, 2022 and 2021, we recognized revenues of $533.4 million and $433.3 million, respectively. Of the $533.4 million recognized in the first six months of 2022, we recognized revenues of $3.4 million from obligations satisfied, or partially satisfied, in prior periods, of which $2.1 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements, and $1.3 million was primarily due to the release of allowances on receivables from clients and unbilled services. Of the $433.3 million recognized in the first six months of 2021, we recognized revenues of $20.8 million from obligations satisfied, or partially satisfied, in prior periods, of which $13.9 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements, and $6.9 million was primarily due to the release of allowances on receivables from clients and unbilled services.
As of June 30, 2022, we had $124.5 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude 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 $124.5 million of performance obligations, we expect to recognize approximately $39.7 million as revenue in 2022, $45.1 million in 2023, and the remaining $39.7 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.
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 June 30, 2022 and December 31, 2021 was $26.8 million and $23.7 million, respectively. The $3.1 million increase primarily reflects timing differences between the completion of our performance obligations and the amounts billed or billable to clients in accordance with their contractual billing terms.
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 June 30, 2022 and December 31, 2021, was $19.0 million and $19.2 million, respectively. The $0.2 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 and six months ended June 30, 2022, $3.4 million and $16.5 million of revenues recognized were included in the deferred revenues balance as of December 31, 2021.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
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, and outstanding common stock options, to the extent dilutive. In periods for which we report a net loss, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss per share would be anti-dilutive.
Earnings per share under the basic and diluted computations are as follows: 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net income$13,875 $12,797 $40,727 $18,202 
Weighted average common shares outstanding – basic20,582 21,555 20,715 21,743 
Weighted average common stock equivalents385 316 332 362 
Weighted average common shares outstanding – diluted20,967 21,871 21,047 22,105 
Net income per basic share$0.67 $0.59 $1.97 $0.84 
Net income per diluted share$0.66 $0.59 $1.94 $0.82 
The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above for the three and six months ended June 30, 2022 and 2021 were less than 0.1 million shares, and related to unvested restricted stock and outstanding common stock options.
In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $50 million of our common stock through December 31, 2021. During the third quarter of 2021, our board of directors authorized an extension of the share repurchase program through December 31, 2022 and increased the authorized amount to $100 million. During the first quarter of 2022, our board of directors authorized a further extension through December 31, 2023 and increased the authorized amount to $200 million. The amount and timing of repurchases under the share repurchase program 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. All shares repurchased and retired are reflected as a reduction to our basic weighted average shares outstanding based on the trade date of the share repurchase.
In the three and six months ended June 30, 2022, we repurchased and retired 497,547 and 1,020,946 shares for $28.3 million and $52.2 million, respectively. Additionally, in the first quarter of 2022, we settled the repurchase of 3,820 shares for $0.2 million that were accrued as of December 31, 2021. In the three and six months ended June 30, 2021, we repurchased and retired 405,363 and 651,081 shares for $22.1 million and $35.2 million, respectively. As of June 30, 2022, $77.9 million remained available for share repurchases under our share repurchase program.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
7. Financing Arrangements
A summary of the carrying amounts of our debt follows:
June 30,
2022
December 31,
2021
Senior secured credit facility$342,000 $230,000 
Promissory note due 2024 2,780 
Total long-term debt342,000 232,780 
Current maturities of long-term debt (559)
Long-term debt, net of current portion$342,000 $232,221 
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 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 June 30, 2022, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 2.20 to 1.00 and a Consolidated Interest Coverage Ratio of 19.03 to 1.00.
Borrowings outstanding under the Amended Credit Agreement at June 30, 2022 totaled $342.0 million. These borrowings carried a weighted average interest rate of 2.6%, 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, 2021 were $230.0 million and carried a weighted average interest rate of 2.7%, including the effect of the interest rate swaps. 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 June 30, 2022, we had
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
outstanding letters of credit totaling $0.7 million, which are used as security deposits for our office facilities. As of June 30, 2022, the unused borrowing capacity under the revolving credit facility was $257.3 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. In the first quarter of 2022, we completed the sale of the aircraft to a third-party and used a portion of the sale proceeds to pay the remaining principal and unpaid interest on the promissory note. Prior to the repayment of the promissory note, the principal balance of the promissory note was subject to scheduled monthly principal payments until the maturity date of March 1, 2024. Under the terms of the promissory note, we paid interest on the outstanding principal amount at a rate of one month LIBOR plus 1.97% per annum. At December 31, 2021, the outstanding principal amount of the promissory note was $2.8 million, and the aircraft had a carrying amount of $3.7 million. As a result of the sale, we recognized a gain of $1.0 million in the first quarter of 2022 and we no longer own any aircraft.
8. Restructuring Charges
Restructuring charges for the three and six months ended June 30, 2022 were $2.1 million and $3.6 million. The $2.1 million of restructuring charges recognized in the second quarter of 2022 included $1.1 million of employee-related expenses, $0.4 million of rent and related expenses, net of sublease income, for previously vacated office spaces, $0.5 million for third-party transaction expenses related to the modification of our operating model, and $0.1 million related to the divestiture of our Life Sciences business in the fourth quarter of 2021. The $3.6 million of restructuring charges incurred in the first six months of 2022 included $1.6 million of employee-related expenses, $1.0 million of rent and related expenses, net of sublease income, for previously vacated office spaces, $0.6 million for third-party transaction expenses related to the modification of our operating model, $0.3 million of accelerated amortization of capitalized software implementation costs for a cloud-computing arrangement that is no longer in use, and $0.1 million related to the divestiture of our Life Sciences business in the fourth quarter of 2021.
Restructuring charges for the three and six months ended June 30, 2021 were $0.9 million and $1.5 million, respectively, and primarily related to rent and related expenses, net of sublease income, and accelerated depreciation on furniture and fixtures for vacated office spaces.
The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the six months ended June 30, 2022.
Employee CostsOther Total
Balance as of December 31, 2021$573 $567 $1,140 
Additions1,617 550 2,167 
Payments(1,016)(810)(1,826)
Adjustments
 40 40 
Balance as of June 30, 2022$1,174 $347 $1,521 
All of the $1.2 million restructuring charge liability related to employee costs at June 30, 2022 is expected to be paid in the next 12 months and is included as a component of accrued payroll and related benefits in our consolidated balance sheet. All of the $0.3 million other restructuring charge liability at June 30, 2022 is expected to be paid over the next 12 months and is included as a component of accrued expenses and other current liabilities in our consolidated balance sheet.
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%.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
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 in the consolidated 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, net of interest income upon settlement. As of June 30, 2022, it was anticipated that $2.2 million of the gains, net of tax, currently recorded in accumulated other comprehensive income will be reclassified into earnings within the next 12 months.
The table below sets forth additional information relating to the interest rate swaps designated as a cash flow hedging instrument as of June 30, 2022 and December 31, 2021.
 Fair Value (Derivative Asset and Liability)
Balance Sheet LocationJune 30,
2022
December 31,
2021
Prepaid expenses and other current assets$3,080 $ 
Other non-current assets$3,578 $1,210 
Accrued expenses and other current liabilities$ $1,604 
Deferred compensation and other liabilities$ $149 
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 in 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 June 30, 2022 and December 31, 2021.
Level 1Level 2Level 3Total
June 30, 2022
Assets:
Interest rate swaps$ $6,658 $ $6,658 
Convertible debt investment