Delaware (State or other jurisdiction of incorporation or organization) | 01-0666114 (I.R.S. Employer Identification Number) |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.01 per share | NASDAQ Global Select Market |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
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ITEM 1. | BUSINESS. |
• | Revenue cycle solutions. Our revenue cycle solutions are designed to optimize performance and deliver sustainable revenue cycle improvement and a predictable revenue stream, while increasing patient, physician, and staff satisfaction. We work with our clients to improve clinical documentation so that it fully and accurately reflects the severity of illness, complexity of care, and resources consumed. Improved physician documentation results in greater coding specificity, improved case mix index, and appropriate reimbursement for utilized resources. Our technology-enabled solutions help clients optimize investments in financial and support systems, and integrate information with work flow to enable high performance organizations. |
• | Cost and clinical solutions. Our cost and clinical solutions focus on providing a systematic and comprehensive approach to help clients reduce costs across the enterprise while optimizing clinical performance, improving quality and outcomes, and achieving staff alignment across the continuum of care. We help clients improve clinical and administrative operations across inpatient, perioperative, emergency, and outpatient settings as well as physician practices through strategic advisory, consulting, and technology-enabled services. We help clients establish operational and data-enabled clinical transformation, scale and integration improvements, and operational excellence. By fully aligning goals and incentives, we help clients drive efficiency and quality across the clinical and administrative enterprises to improve quality outcomes, reduce costs, and improve patient and staff satisfaction. |
• | Studer Group. Studer Group® works with healthcare organizations primarily in the United States and Canada to build a sustainable culture that promotes accountability and fosters innovation. Through the use of coaching partnerships, software accelerators, and leadership conferences, Studer Group partners with organizations to help them achieve and sustain exceptional improvement in clinical outcomes and financial results. |
• | Higher Education. Our higher education professionals have extensive experience working with colleges and universities on complex strategic, financial, operational, and technology issues. Our strategy and operations solutions assist institutions of higher education align their missions and strategic priorities with their operations to improve quality and reduce costs across the organization. Our strategy and operations solutions include enrollment management, student lifecycle management, financial management, and performance improvement services. To support an institution's technology, data, and analytics strategy, our technology professionals provide services in enterprise systems planning, design and implementation, IT strategy, and governance and research software products and implementation services. Our research solutions, including operational, compliance, and cost reimbursement, assist our clients as they face immense regulatory and cost and reimbursement pressure in their research organizations. |
• | Life Sciences. Our Life Sciences practice brings together a highly skilled team of professionals focused on helping companies, from large pharmaceuticals to newly formed biotechs, to drive measurable value and comply with government regulations. We provide clients with integrated solutions across the life sciences value chain in the areas of corporate and financial strategy, compliance and operations, reimbursement and access strategy, commercial segmentation, lifecycle management and R&D and product strategy. We assist companies in complying with government regulations including fair market value analysis, litigation and investigations, and auditing and monitoring. In addition, we advise companies on commercial contracting strategies, government pricing and transparency reporting, data strategy and analytics, and overall business process improvement. |
• | Business Advisory. Our Business Advisory practice resolves complex business issues and enhances client enterprise value through a suite of services including capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory. We improve operations or capital structures for businesses performing at less than optimal levels, assess the short-term and long-term prospects of potential acquisition and divestiture opportunities, and provide independent valuation and consulting services to assist clients in making informed decisions for transaction, tax, or litigation purposes. Securities transactions are provided by our registered broker-dealer Huron Transaction Advisory LLC, a member of FINRA. |
• | Enterprise Performance Management and Analytics. Our Enterprise Performance Management and Analytics professionals deliver solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client experience. With expertise in full-service enterprise performance management (EPM), business analytics, customer relationship management (CRM), and big data professional services, Huron's global presence and remote delivery capabilities help clients drive results and gain a competitive advantage. Our comprehensive offerings include organizational improvements and technology consulting, leveraging both cloud and on-premise configurations. Huron is a Platinum level member of the Oracle PartnerNetwork (OPN) and a Silver level partner of the Salesforce.com partner network. |
ITEM 1A. | RISK FACTORS. |
• | the diversion of management’s time, attention, and resources from managing and marketing our Company; |
• | the failure to retain key acquired personnel or existing personnel who may view the acquisition unfavorably; |
• | the potential loss of clients of acquired businesses; |
• | the need to compensate new employees while they wait for their restrictive covenants with other institutions to expire; |
• | the potential need to raise significant amounts of capital to finance a transaction or the potential issuance of equity securities that could be dilutive to our existing stockholders; |
• | increased costs to improve, coordinate, or integrate managerial, operational, financial, and administrative systems; |
• | the potential assumption of liabilities of an acquired business; |
• | the inability to attain the expected synergies with an acquired business; |
• | the usage of earn-outs based on the future performance of our business acquisitions may deter the acquired company from fully integrating into our existing business; |
• | the perception of inequalities if different groups of employees are eligible for different benefits and incentives or are subject to different policies and programs; and |
• | difficulties in integrating diverse backgrounds and experiences of consultants, including if we experience a transition period for newly hired consultants that results in a temporary drop in our utilization rates or margins. |
• | fluctuations in U.S. and global economies; |
• | the U.S. or global financial markets and the availability, costs, and terms of credit; |
• | changes in laws and regulations; and |
• | other economic factors and general business conditions. |
• | attract, integrate, retain, and motivate highly qualified professionals; |
• | achieve and maintain adequate utilization and suitable billing rates for our revenue-generating professionals; |
• | expand our existing relationships with our clients and identify new clients in need of our services; |
• | successfully resell engagements and secure new engagements every year; |
• | maintain and enhance our brand recognition; and |
• | adapt quickly to meet changes in our markets, our business mix, the economic environment, the credit markets, and competitive developments. |
• | the number and size of client engagements; |
• | the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable; |
• | our ability to transition our consultants efficiently from completed engagements to new engagements; |
• | the hiring of additional consultants because there is generally a transition period for new consultants that results in a temporary drop in our utilization rate; |
• | unanticipated changes in the scope of client engagements; |
• | our ability to forecast demand for our services and thereby maintain an appropriate level of consultants; and |
• | conditions affecting the industries in which we practice as well as general economic conditions. |
• | our clients’ perception of our ability to add value through our services; |
• | the market demand for the services we provide; |
• | an increase in the number of clients in the government sector; |
• | introduction of new services by us or our competitors; |
• | our competition and the pricing policies of our competitors; and |
• | current economic conditions. |
• | the timing and volume of client invoices processed and payments received, which may affect the fees payable to us under certain of our engagements; |
• | client decisions regarding renewal or termination of their contracts; |
• | the amount and timing of costs related to the development or acquisition of technologies or businesses; and |
• | unforeseen legal expenses, including litigation and other settlement gains or losses. |
• | compliance with additional U.S. regulations and those of other nations applicable to international operations; |
• | cultural and language differences; |
• | employment laws and rules and related social and cultural factors; |
• | losses related to start-up costs, lack of revenue, higher costs due to low utilization, and delays in purchase decisions by prospective clients; |
• | currency fluctuations between the U.S. dollar and foreign currencies, which are harder to predict in the current adverse global economic climate; |
• | restrictions on the repatriation of earnings; |
• | potentially adverse tax consequences and limitations on our ability to utilize losses generated in our foreign operations; |
• | different regulatory requirements and other barriers to conducting business; |
• | different or less stable political and economic environments; |
• | greater personal security risks for employees traveling to or located in unstable locations; and |
• | civil disturbances or other catastrophic events. |
• | expose us to the risk of increased interest rates because some of our borrowings are at variable interest rates; |
• | make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry, and competitive conditions and adverse changes in government regulation; |
• | limit our ability to obtain additional financing and flexibility in planning for, or reacting to, changes in our business and our industry; |
• | place us at a disadvantage compared to our competitors who have less debt or have better access to capital resources; and |
• | require us to dedicate a larger portion of our cash from operations to service our indebtedness and thus reduce the level of cash for other purposes such as funding working capital, strategic acquisitions, capital expenditures, and other general corporate purposes. |
• | our inability to estimate demand for the new service offerings; |
• | competition from more established market participants; |
• | a lack of market understanding; and |
• | unanticipated expenses to recruit and hire qualified consultants and to market our new service offerings. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
ITEM 2. | PROPERTIES. |
ITEM 3. | LEGAL PROCEEDINGS. |
ITEM 4. | MINE SAFETY DISCLOSURES. |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
High | Low | ||||||
2014 | |||||||
First Quarter | $ | 70.41 | $ | 59.27 | |||
Second Quarter | $ | 72.07 | $ | 57.18 | |||
Third Quarter | $ | 72.66 | $ | 59.67 | |||
Fourth Quarter | $ | 72.80 | $ | 59.54 | |||
2015 | |||||||
First Quarter | $ | 78.89 | $ | 62.29 | |||
Second Quarter | $ | 71.92 | $ | 58.13 | |||
Third Quarter | $ | 78.13 | $ | 61.37 | |||
Fourth Quarter | $ | 65.03 | $ | 43.35 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2) | |||||||||
October 1, 2015 – October 31, 2015 | 75 | $ | 62.53 | — | $ | 36,501,715 | |||||||
November 1, 2015 – November 30, 2015 | — | $ | — | — | $ | 36,501,715 | |||||||
December 1, 2015 – December 31, 2015 | 399,823 | $ | 57.62 | 366,601 | $ | 90,408,840 | |||||||
Total | 399,898 | $ | 57.62 | 366,601 |
(1) | The number of shares purchased includes 75 shares in October 2015 and 33,222 shares in December 2015 to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the October 2014 Share Repurchase Program. |
(2) | As of the end of the period. |
ITEM 6. | SELECTED FINANCIAL DATA. |
Consolidated Statements of Operations Data (in thousands, except per share data): | Year Ended December 31, | ||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Revenues and reimbursable expenses: | |||||||||||||||||||
Revenues | $ | 699,010 | $ | 627,686 | $ | 538,128 | $ | 441,043 | $ | 433,959 | |||||||||
Reimbursable expenses | 70,013 | 73,847 | 64,623 | 52,354 | 48,959 | ||||||||||||||
Total revenues and reimbursable expenses | 769,023 | 701,533 | 602,751 | 493,397 | 482,918 | ||||||||||||||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses) (1): | |||||||||||||||||||
Direct costs | 401,915 | 384,277 | 323,398 | 261,092 | 259,284 | ||||||||||||||
Amortization of intangible assets and software development costs | 16,788 | 4,590 | 2,660 | 3,635 | 5,349 | ||||||||||||||
Reimbursable expenses | 69,932 | 73,855 | 64,665 | 52,360 | 49,070 | ||||||||||||||
Total direct costs and reimbursable expenses | 488,635 | 462,722 | 390,723 | 317,087 | 313,703 | ||||||||||||||
Operating expenses and other operating gains: | |||||||||||||||||||
Selling, general and administrative expenses | 157,902 | 132,799 | 116,976 | 107,616 | 105,642 | ||||||||||||||
Restructuring charges | 3,329 | 2,811 | 305 | 3,047 | 3,798 | ||||||||||||||
Restatement related expenses | — | — | — | 1,785 | 4,579 | ||||||||||||||
Litigation and other (gains) losses | (9,476 | ) | (590 | ) | (5,875 | ) | 1,150 | 1,096 | |||||||||||
Depreciation and amortization (1) | 25,135 | 15,451 | 10,723 | 10,650 | 13,019 | ||||||||||||||
Goodwill impairment charges | — | — | — | 13,083 | 21,973 | ||||||||||||||
Total operating expenses and other operating gains | 176,890 | 150,471 | 122,129 | 137,331 | 150,107 | ||||||||||||||
Operating income | 103,498 | 88,340 | 89,899 | 38,979 | 19,108 | ||||||||||||||
Other income (expense), net: | |||||||||||||||||||
Interest expense, net of interest income | (18,136 | ) | (8,679 | ) | (6,475 | ) | (8,142 | ) | (12,092 | ) | |||||||||
Other income (expense), net | (1,797 | ) | 400 | 353 | 425 | (323 | ) | ||||||||||||
Total other expense, net | (19,933 | ) | (8,279 | ) | (6,122 | ) | (7,717 | ) | (12,415 | ) | |||||||||
Income from continuing operations before income tax expense | 83,565 | 80,061 | 83,777 | 31,262 | 6,693 | ||||||||||||||
Income tax expense | 21,670 | 33,059 | 32,200 | 14,211 | 6,015 | ||||||||||||||
Net income from continuing operations | 61,895 | 47,002 | 51,577 | 17,051 | 678 | ||||||||||||||
Income (loss) from discontinued operations, net of tax | (2,843 | ) | 32,049 | 14,856 | 19,377 | 19,841 | |||||||||||||
Net income | $ | 59,052 | $ | 79,051 | $ | 66,433 | $ | 36,428 | $ | 20,519 |
Consolidated Statements of Operations Data (in thousands, except per share data): | Year Ended December 31, | ||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Net earnings per basic share: | |||||||||||||||||||
Net income from continuing operations | $ | 2.80 | $ | 2.10 | $ | 2.31 | $ | 0.78 | $ | 0.03 | |||||||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.42 | 0.67 | 0.88 | 0.93 | |||||||||||||
Net income | $ | 2.67 | $ | 3.52 | $ | 2.98 | $ | 1.66 | $ | 0.96 | |||||||||
Net earnings per diluted share: | |||||||||||||||||||
Net income from continuing operations | $ | 2.74 | $ | 2.05 | $ | 2.26 | $ | 0.77 | $ | 0.03 | |||||||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.40 | $ | 0.66 | $ | 0.86 | $ | 0.92 | ||||||||||
Net income | $ | 2.61 | $ | 3.45 | $ | 2.92 | $ | 1.63 | $ | 0.95 | |||||||||
Weighted average shares used in calculating net earnings per share: | |||||||||||||||||||
Basic | 22,136 | 22,431 | 22,322 | 21,905 | 21,324 | ||||||||||||||
Diluted | 22,600 | 22,925 | 22,777 | 22,285 | 21,676 |
Consolidated Balance Sheet Data (in thousands): | As of December 31, | ||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Cash and cash equivalents | $ | 58,437 | $ | 256,872 | $ | 58,131 | $ | 25,162 | $ | 5,080 | |||||||||
Working capital | $ | 98,168 | $ | 309,783 | $ | 99,130 | $ | 83,647 | $ | 41,822 | |||||||||
Total assets | $ | 1,164,160 | $ | 1,155,914 | $ | 885,600 | $ | 787,900 | $ | 786,644 | |||||||||
Long-term debt (2) | $ | 311,993 | $ | 327,852 | $ | 143,798 | $ | 192,500 | $ | 193,500 | |||||||||
Total stockholders’ equity (3) | $ | 652,325 | $ | 600,634 | $ | 530,264 | $ | 445,321 | $ | 396,789 |
(1) | Intangible assets amortization relating to customer contracts, certain client relationships, and software and amortization of software development costs are presented as a component of total direct costs. Depreciation and intangible assets amortization not classified as direct costs are presented as a component of operating expenses. |
(2) | Consists of bank borrowings, convertible senior notes, and capital lease obligations, net of current portions. |
(3) | We have not declared or paid dividends on our common stock in the periods presented above. See Item 5. "Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividends.” |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Segment and Consolidated Operating Results (in thousands): | |||||||||||
Huron Healthcare: | |||||||||||
Revenues | $ | 446,887 | $ | 415,803 | $ | 358,766 | |||||
Operating income | $ | 169,560 | $ | 159,015 | $ | 141,870 | |||||
Segment operating income as a percentage of segment revenues | 37.9 | % | 38.2 | % | 39.5 | % | |||||
Huron Education and Life Sciences: | |||||||||||
Revenues | $ | 167,933 | $ | 145,962 | $ | 143,609 | |||||
Operating income | $ | 44,216 | $ | 36,131 | $ | 35,966 | |||||
Segment operating income as a percentage of segment revenues | 26.3 | % | 24.8 | % | 25.0 | % | |||||
Huron Business Advisory: | |||||||||||
Revenues | $ | 82,968 | $ | 62,840 | $ | 34,669 | |||||
Operating income | $ | 19,263 | $ | 14,035 | $ | 7,211 | |||||
Segment operating income as a percentage of segment revenues | 23.2 | % | 22.3 | % | 20.8 | % | |||||
All Other: | |||||||||||
Revenues | $ | 1,222 | $ | 3,081 | $ | 1,084 | |||||
Operating loss | $ | (1,718 | ) | $ | (2,466 | ) | $ | (1,256 | ) | ||
Segment operating loss as a percentage of segment revenues | N/M | N/M | N/M | ||||||||
Total Company: | |||||||||||
Revenues | $ | 699,010 | $ | 627,686 | $ | 538,128 | |||||
Reimbursable expenses | 70,013 | 73,847 | 64,623 | ||||||||
Total revenues and reimbursable expenses | $ | 769,023 | $ | 701,533 | $ | 602,751 | |||||
Statements of Earnings reconciliation: | |||||||||||
Segment operating income | $ | 231,321 | $ | 206,715 | $ | 183,791 | |||||
Items not allocated at the segment level: | |||||||||||
Other operating expenses and gains | 102,688 | 102,924 | 83,169 | ||||||||
Depreciation and amortization expense | 25,135 | 15,451 | 10,723 | ||||||||
Total operating income | $ | 103,498 | $ | 88,340 | $ | 89,899 | |||||
Other Operating Data (excluding All Other): | |||||||||||
Number of full-time billable consultants (at period end) (1): | |||||||||||
Huron Healthcare | 1,037 | 1,099 | 966 | ||||||||
Huron Education and Life Sciences | 478 | 418 | 413 | ||||||||
Huron Business Advisory | 306 | 205 | 155 | ||||||||
Total | 1,821 | 1,722 | 1,534 | ||||||||
Average number of full-time billable consultants (for the period) (1): | |||||||||||
Huron Healthcare | 1,085 | 1,070 | 907 | ||||||||
Huron Education and Life Sciences | 442 | 417 | 427 | ||||||||
Huron Business Advisory | 243 | 180 | 85 | ||||||||
Total | 1,770 | 1,667 | 1,419 | ||||||||
Full-time billable consultant utilization rate (2): | |||||||||||
Huron Healthcare | 77.9 | % | 78.3 | % | 83.0 | % | |||||
Huron Education and Life Sciences | 75.5 | % | 71.3 | % | 66.6 | % | |||||
Huron Business Advisory | 75.0 | % | 68.0 | % | 72.7 | % | |||||
Total | 76.9 | % | 75.4 | % | 77.4 | % | |||||
Full-time billable consultant average billing rate per hour (3): | |||||||||||
Huron Healthcare | $ | 217 | $ | 248 | $ | 233 | |||||
Huron Education and Life Sciences | $ | 231 | $ | 219 | $ | 216 | |||||
Huron Business Advisory (4) | $ | 228 | $ | 255 | $ | 285 | |||||
Total | $ | 222 | $ | 242 | $ | 232 |
Other Operating Data (continued): | |||||||||||
Revenue per full-time billable consultant (in thousands): | |||||||||||
Huron Healthcare | $ | 313 | $ | 363 | $ | 369 | |||||
Huron Education and Life Sciences | $ | 325 | $ | 292 | $ | 272 | |||||
Huron Business Advisory | $ | 328 | $ | 330 | $ | 392 | |||||
Total | $ | 318 | $ | 341 | $ | 341 | |||||
Average number of full-time equivalents (for the period) (5): | |||||||||||
Huron Healthcare | 179 | 60 | 53 | ||||||||
Huron Education and Life Sciences | 43 | 43 | 44 | ||||||||
Huron Business Advisory | 8 | 9 | 2 | ||||||||
Total | 230 | 112 | 99 | ||||||||
Revenue per full-time equivalent (in thousands): | |||||||||||
Huron Healthcare | $ | 604 | $ | 461 | $ | 449 | |||||
Huron Education and Life Sciences | $ | 574 | $ | 558 | $ | 620 | |||||
Huron Business Advisory | $ | 408 | $ | 390 | $ | 530 | |||||
Total | $ | 591 | $ | 493 | $ | 530 |
(1) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. |
(2) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all of our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. |
(3) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
(4) | The Huron Business Advisory segment includes the operations of Rittman Mead India, a business we acquired effective July 1, 2015. Absent the impact of Rittman Mead India, the average billing rate per hour for Huron Business Advisory for the year ended December 31, 2015 would have been $256. |
(5) | Consists of consultants who work variable schedules as needed by our clients, including full-time employees who provide software support and maintenance services to our clients, and cultural transformation consultants within our Studer Group solution, which include coaches and their support staff. |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenues | $ | 699,010 | $ | 627,686 | $ | 538,128 | |||||
Net income from continuing operations | $ | 61,895 | $ | 47,002 | $ | 51,577 | |||||
Add back: | |||||||||||
Income tax expense | 21,670 | 33,059 | 32,200 | ||||||||
Interest and other expenses | 19,933 | 8,279 | 6,122 | ||||||||
Depreciation and amortization | 41,923 | 20,041 | 13,383 | ||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | 145,421 | 108,381 | 103,282 | ||||||||
Add back: | |||||||||||
Restructuring charges | 3,329 | 2,811 | 305 | ||||||||
Litigation and other gains, net | (9,476 | ) | (590 | ) | (5,875 | ) | |||||
Adjusted EBITDA | $ | 139,274 | $ | 110,602 | $ | 97,712 | |||||
Adjusted EBITDA as a percentage of revenues | 19.9 | % | 17.6 | % | 18.2 | % |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Net income from continuing operations | $ | 61,895 | $ | 47,002 | $ | 51,577 | |||||
Weighted average shares—diluted | 22,600 | 22,925 | 22,777 | ||||||||
Diluted earnings per share from continuing operations | $ | 2.74 | $ | 2.05 | $ | 2.26 | |||||
Add back: | |||||||||||
Amortization of intangible assets | 28,696 | 8,896 | 3,933 | ||||||||
Restructuring charges | 3,329 | 2,811 | 305 | ||||||||
Litigation and other gains, net | (9,476 | ) | (590 | ) | (5,875 | ) | |||||
Non-cash interest on convertible notes | 7,141 | 2,139 | — | ||||||||
Tax effect | (11,698 | ) | (5,302 | ) | 655 | ||||||
Net tax (benefit) expense related to “check-the-box” elections | (12,336 | ) | 1,161 | — | |||||||
Total adjustments, net of tax | 5,656 | 9,115 | (982 | ) | |||||||
Adjusted net income from continuing operations | $ | 67,551 | $ | 56,117 | $ | 50,595 | |||||
Adjusted diluted earnings per share from continuing operations | $ | 2.99 | $ | 2.45 | $ | 2.22 |
Cash Flows (in thousands): | Year Ended December 31, | ||||||||||
2015 | 2014 | 2013 | |||||||||
Net cash provided by operating activities | $ | 164,267 | $ | 146,453 | $ | 115,258 | |||||
Net cash used in investing activities | $ | (272,158 | ) | $ | (93,831 | ) | $ | (52,658 | ) | ||
Net cash provided by (used in) financing activities | $ | (89,955 | ) | $ | 146,170 | $ | (29,648 | ) | |||
Effect of exchange rate changes on cash | $ | (589 | ) | $ | (51 | ) | $ | 17 | |||
Net increase (decrease) in cash and cash equivalents | $ | (198,435 | ) | $ | 198,741 | $ | 32,969 |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
Long-term bank borrowings—principal and interest (1) | $ | 99,522 | $ | 1,770 | $ | 3,540 | $ | 94,212 | $ | — | |||||||||
Convertible senior notes—principal and interest (2) | 262,500 | 3,125 | 6,250 | 253,125 | — | ||||||||||||||
Operating lease obligations (3) | 83,045 | 16,896 | 23,187 | 16,457 | 26,505 | ||||||||||||||
Purchase obligations (4) | 24,025 | 10,939 | 12,245 | 841 | — | ||||||||||||||
Contingent consideration (5) | 2,063 | — | 2,063 | — | — | ||||||||||||||
Uncertain tax positions (6) | 3,223 | ||||||||||||||||||
Deferred compensation (7) | 13,120 | ||||||||||||||||||
Total contractual obligations | $ | 487,498 | $ | 32,730 | $ | 47,285 | $ | 364,635 | $ | 26,505 |
(1) | The interest payments on long-term bank borrowings are estimated in the table above based on the principal amount outstanding and the interest rate in effect as of December 31, 2015. Actual future interest payments will differ due to changes in our borrowings outstanding and the interest rate on those borrowings, as the interest rate varies based on the fluctuations in the variable base rates and the spread we pay over those base rates pursuant to the Amended Credit Agreement. Refer to “Liquidity and Capital Resources” and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for more information on our outstanding borrowings. |
(2) | In September 2014, we issued $250 million principal of 1.25% convertible senior notes due 2019. We will pay cash interest on the outstanding notes at an annual rate of 1.25% semi-annually on April 1 and October 1 of each year until October 1, 2019, at which time we will repay any accrued and unpaid interest and the principal amount of all outstanding notes. |
(3) | We lease our facilities under operating lease arrangements expiring on various dates through 2026, with various renewal options. We lease office facilities under non-cancelable operating leases that include fixed or minimum payments plus, in some cases, scheduled base rent increases over the term of the lease. Certain leases provide for monthly payments of real estate taxes, insurance and other operating expense applicable to the property. Some of the leases contain provisions whereby the future rental payments may be adjusted for increases in operating expense above the specified amount. |
(4) | Purchase obligations include sponsorships, subscriptions to research tools, information technology, and other commitments to purchase services where we cannot cancel or would be required to pay a termination fee in the event of cancellation. |
(5) | In connection with a business acquisition, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreement. As of December 31, 2015, the |
(6) | Our liabilities for uncertain tax positions are classified as non-current. As we are unable to reasonably estimate the timing of future payments as it depends on examinations by taxing authorities, the related balance has not been reflected in the “Payments Due by Period” section of the table. |
(7) | Included in deferred compensation and other liabilities on our consolidated balance sheet as of December 31, 2015 is a $13.1 million obligation for deferred compensation. As the specific payment dates for the deferred compensation are unknown, the related balances have not been reflected in the “Payments Due by Period” section of the table. Refer to Note 14 “Employee Benefit and Deferred Compensation Plans” within the notes to our consolidated financial statements for more information on our deferred compensation plan. |
Discount rate increased by 100 bps | Long-term growth rate decreased by 100 bps | |||||||
Huron Healthcare | ||||||||
Decrease in fair value | $ | (77,100 | ) | $ | (55,000 | ) | ||
Percentage by which fair value exceeds carrying value | 69 | % | 72 | % | ||||
Huron Education and Life Sciences | ||||||||
Decrease in fair value | $ | (14,300 | ) | $ | (10,300 | ) | ||
Percentage by which fair value exceeds carrying value | 68 | % | 71 | % | ||||
Financial Advisory | ||||||||
Decrease in fair value | $ | (2,500 | ) | $ | (1,700 | ) | ||
Percentage by which fair value exceeds carrying value | 107 | % | 111 | % | ||||
EPM&A | ||||||||
Decrease in fair value | $ | (2,300 | ) | $ | (1,400 | ) | ||
Percentage by which fair value exceeds carrying value | 9 | % | 11 | % |
Reporting Unit | Carrying Value of Goodwill | |||
Huron Healthcare | $ | 610,264 | ||
Huron Education and Life Sciences | 102,906 | |||
Financial Advisory | 16,094 | |||
Enterprise Performance Management and Analytics | 22,136 | |||
Total | $ | 751,400 |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM 9A. | CONTROLS AND PROCEDURES. |
(i) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
(ii) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
(iii) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
ITEM 9B. | OTHER INFORMATION. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
ITEM 11. | EXECUTIVE COMPENSATION. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
Plan Category | Number of Shares to be Issued Upon Exercise of Outstanding Options | Weighted Average Exercise Price of Outstanding Options | Number of Shares Remaining Available for Future Issuance (excluding shares in 1st column) | |||||||
Equity compensation plans approved by shareholders (1): | ||||||||||
2004 Omnibus Stock Plan | 162,386 | $ | 26.69 | — | (2) | |||||
2012 Omnibus Incentive Plan | 36,617 | $ | 39.19 | 943,016 | ||||||
Stock Ownership Participation Program | — | $ | — | 260,293 | ||||||
Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||
Total | 199,003 | $ | 28.99 | 1,203,309 |
(1) | Our 2012 Omnibus Incentive Plan was approved by our shareholders at our annual meeting held on May 1, 2012, and an amendment to the 2012 Omnibus Incentive Plan to increase the number of shares reserved for issuance thereunder by 850,000 shares was approved by our shareholders at our annual meeting held on May 2, 2014. Our Stock Ownership Participation Program was approved by our shareholders at our annual meeting held on May 1, 2015. Our 2004 Omnibus Stock Plan was approved by the existing shareholders prior to our initial public offering. |
(2) | Upon adoption of the 2012 Omnibus Incentive Plan, we terminated the 2004 Omnibus Stock Plan with respect to future awards and no further awards will be granted under this plan. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
1. | Financial Statements—Our independent registered public accounting firm’s report and our Consolidated Financial Statements are listed below and begin on page F-1 of this Form 10-K. |
2. | Financial Statement Schedules—The financial statement schedules required by this item are included in the Consolidated Financial Statements and accompanying notes. |
3. | Exhibit Index |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
2.1 | Agreement and Plan of Merger, dated as of January 26, 2015, by and among Huron Consulting Group Inc., Texas Acquisition Inc., Studer Holdings, Inc. and Fortis Advisors LLC, solely in the capacity as stockholders’ and optionholders’ representative thereunder. | 8-K | 2.1 | 2/13/2015 | |||
2.2 | Purchase Agreement, dated as of December 10, 2015, by and among Huron Consulting Group Inc., Huron Consulting Services LLC, Huron Consulting Group Holdings LLC, and Consilio, Inc. | 8-K | 2.1 | 1/7/2016 | |||
3.1 | Third Amended and Restated Certificate of Incorporation of Huron Consulting Group Inc. | 10-K | 12/31/2004 | 3.1 | 2/16/2005 | ||
3.2 | Amended and Restated Bylaws of Huron Consulting Group Inc. | 8-K | 3.1 | 10/28/2015 | |||
4.1 | Specimen Stock Certificate. | S-1 (File No. 333- 115434) | 4.1 | 10/5/2004 | |||
4.2 | Indenture (including Form of Note) with respect to the Company’s 1.25% Convertible Senior Notes due 2019, dated as of September 10, 2014, between Huron Consulting Group Inc. and U.S. Bank National Association, as trustee. | 8-K | 10.1 | 9/16/2014 | |||
10.1 | Office Lease, dated December 2003, between Union Tower, LLC and Huron Consulting Services LLC (formerly known as Huron Consulting Group LLC). | S-1 (File No. 333- 115434) | 10.1 | 10/5/2004 | |||
10.2* | Amended and Restated Huron Consulting Group Inc. 2004 Omnibus Stock Plan. | S-8 | 10.1 | 5/5/2010 | |||
10.3* | Huron Consulting Group Inc. Deferred Compensation Plan as Amended and Restated effective January 1, 2009. | 10-K | 12/31/2008 | 10.12 | 2/24/2009 | ||
10.4* | Amended and Restated Senior Management Agreement by and between Huron Consulting Group Inc. and James H. Roth. | 8-K | 10.1 | 1/14/2010 |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
10.5* | Senior Management Agreement by and between Huron Consulting Group Inc. and Diane Ratekin. | 8-K | 10.1 | 3/22/2011 | |||
10.6* | Senior Management Agreement by and between Huron Consulting Group Inc. and C. Mark Hussey. | 8-K | 10.1 | 7/19/2011 | |||
10.7 | First Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated August 23, 2004. | 10-K | 12/31/2012 | 10.17 | 2/21/2013 | ||
10.8 | Second Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated March 14, 2007. | 10-K | 12/31/2012 | 10.18 | 2/21/2013 | ||
10.9 | Third Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated April 2, 2010. | 10-K | 12/31/2012 | 10.19 | 2/21/2013 | ||
10.10 | Fourth Amendment to Lease by and between Huron Consulting Services LLC and Union Tower, LLC, dated December 31, 2012. | 8-K | 10.1 | 1/4/2013 | |||
10.11* | Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Restricted Stock Agreement. | 10-K | 12/31/2012 | 10.20 | 2/21/2013 | ||
10.12 | Purchase Agreement, dated as of September 4, 2014, between Huron Consulting Group Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as Representatives of the several Initial Purchasers. | 8-K | 10.1 | 9/5/2014 | |||
10.13 | Base Convertible Bond Hedge Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A. | 8-K | 10.2 | 9/5/2014 | |||
10.14 | Base Convertible Bond Hedge Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch. | 8-K | 10.3 | 9/5/2014 | |||
10.15 | Base Issuer Warrant Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A. | 8-K | 10.4 | 9/5/2014 | |||
10.16 | Base Issuer Warrant Transaction Confirmation, dated as of September 4, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch. | 8-K | 10.5 | 9/5/2014 | |||
10.17 | Additional Convertible Bond Hedge Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A. | 8-K | 10.1 | 9/16/2014 | |||
10.18 | Additional Convertible Bond Hedge Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch. | 8-K | 10.2 | 9/16/2014 |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
10.19 | Additional Issuer Warrant Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and Bank of America, N.A. | 8-K | 10.3 | 9/16/2014 | |||
10.20 | Additional Issuer Warrant Transaction Confirmation, dated as of September 10, 2014, by and between Huron Consulting Group Inc. and J.P. Morgan Securities LLC, as an agent for JPMorgan Chase Bank, National Association, London Branch. | 8-K | 10.4 | 9/16/2014 | |||
10.21* | Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Restricted Stock Agreement (Stock Ownership Participation Program). | 10-K | 12/31/2014 | 10.31 | 2/24/2015 | ||
10.22* | Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Performance Stock Unit Agreement. | 10-K | 12/31/2014 | 10.32 | 2/24/2015 | ||
10.23* | Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan Stock Option Agreement. | 10-K | 12/31/2014 | 10.33 | 2/24/2015 | ||
10.24* | Form of the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan NEO Performance Stock Unit Agreement. | 10-K | 12/31/2014 | 10.34 | 2/24/2015 | ||
10.25 | Second Amended and Restated Credit Agreement, dated as of March 31, 2015, among Huron Consulting Group Inc., as Borrower, certain subsidiaries as Guarantors, the Lenders Party Hereto and Bank of America, N.A., as Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, PNC Bank, Bank of Montreal and Key Bank National Association as Co-Documentation Agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Book Managers. | 8-K | 10.1 | 4/2/2015 | |||
10.26 | Second Amended and Restated Security Agreement, dated as of March 31, 2015. | 8-K | 10.2 | 4/2/2015 | |||
10.27 | Second Amended and Restated Pledge Agreement, dated as of March 31, 2015. | 8-K | 10.3 | 4/2/2015 | |||
10.28* | Huron Consulting Group Inc. Stock Ownership Participation Program. | DEF 14A | Appendix A | 3/20/2015 | |||
10.29* | Huron Consulting Group Inc. 2012 Omnibus Incentive Plan, as amended and restated. | X | |||||
21.1 | List of Subsidiaries of Huron Consulting Group Inc. | X | |||||
23.1 | Consent of PricewaterhouseCoopers LLP. | X | |||||
31.1 | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | |||||
31.2 | Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
32.1 | Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | |||||
32.2 | Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | |||||
101.INS | XBRL Instance Document. | X | |||||
101.SCH | XBRL Taxonomy Extension Schema Document. | X | |||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | X | |||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | X | |||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | X | |||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | X |
* | Indicates the exhibit is a management contract or compensatory plan or arrangement. |
Huron Consulting Group Inc. | ||||
(Registrant) |
Signature | Title | Date | ||
/s/ James H. Roth | President, Chief Executive Officer and Director | February 22, 2016 | ||
James H. Roth |
Signature | Title | Date | ||
/s/ JAMES H. ROTH | President, Chief Executive Officer and Director (Principal Executive Officer) | February 22, 2016 | ||
James H. Roth | ||||
/s/ JOHN F. MCCARTNEY | Non-Executive Chairman of the Board | February 22, 2016 | ||
John F. McCartney | ||||
/s/ GEORGE E. MASSARO | Vice Chairman of the Board | February 22, 2016 | ||
George E. Massaro | ||||
/s/ C. MARK HUSSEY | Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) | February 22, 2016 | ||
C. Mark Hussey | ||||
/s/ JOHN D. KELLY | Chief Accounting Officer and Assistant Treasurer (Principal Accounting Officer) | February 22, 2016 | ||
John D. Kelly | ||||
/s/ JAMES D. EDWARDS | Director | February 22, 2016 | ||
James D. Edwards | ||||
/s/ H. EUGENE LOCKHART | Director | February 22, 2016 | ||
H. Eugene Lockhart | ||||
/s/ JOHN S. MOODY | Director | February 22, 2016 | ||
John S. Moody | ||||
/s/ DEBRA ZUMWALT | Director | February 22, 2016 | ||
Debra Zumwalt |
December 31, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 58,437 | $ | 256,872 | |||
Receivables from clients, net | 85,297 | 76,490 | |||||
Unbilled services, net | 56,527 | 84,206 | |||||
Income tax receivable | 406 | 8,016 | |||||
Deferred income taxes, net | — | 14,629 | |||||
Prepaid expenses and other current assets | 28,922 | 13,583 | |||||
Current assets of discontinued operations | — | 32,363 | |||||
Total current assets | 229,589 | 486,159 | |||||
Property and equipment, net | 28,888 | 30,691 | |||||
Long-term investment | 34,831 | 12,250 | |||||
Other non-current assets | 24,460 | 19,920 | |||||
Intangible assets, net | 94,992 | 21,729 | |||||
Goodwill | 751,400 | 514,591 | |||||
Non-current assets of discontinued operations | — | 70,574 | |||||
Total assets | $ | 1,164,160 | $ | 1,155,914 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 7,220 | $ | 10,804 | |||
Accrued expenses | 24,276 | 17,051 | |||||
Accrued payroll and related benefits | 80,839 | 105,522 | |||||
Current maturities of long-term debt | — | 28,750 | |||||
Deferred revenues | 19,086 | 12,469 | |||||
Current liabilities of discontinued operations | — | 1,780 | |||||
Total current liabilities | 131,421 | 176,376 | |||||
Non-current liabilities: | |||||||
Deferred compensation and other liabilities | 23,768 | 11,221 | |||||
Long-term debt, net of current portion | 311,993 | 327,852 | |||||
Deferred lease incentives | 9,965 | 12,671 | |||||
Deferred income taxes, net | 34,688 | 26,657 | |||||
Non-current liabilities of discontinued operations | — | 503 | |||||
Total non-current liabilities | 380,414 | 378,904 | |||||
Commitments and Contingencies | |||||||
Stockholders’ equity | |||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 24,775,823 and 24,976,395 shares issued at December 31, 2015 and December 31, 2014, respectively | 241 | 241 | |||||
Treasury stock, at cost, 2,249,630 and 2,097,173 shares at December 31, 2015 and December 31, 2014, respectively | (103,734 | ) | (94,074 | ) | |||
Additional paid-in capital | 438,367 | 442,308 | |||||
Retained earnings | 313,866 | 254,814 | |||||
Accumulated other comprehensive income (loss) | 3,585 | (2,655 | ) | ||||
Total stockholders’ equity | 652,325 | 600,634 | |||||
Total liabilities and stockholders’ equity | $ | 1,164,160 | $ | 1,155,914 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenues and reimbursable expenses: | |||||||||||
Revenues | $ | 699,010 | $ | 627,686 | $ | 538,128 | |||||
Reimbursable expenses | 70,013 | 73,847 | 64,623 | ||||||||
Total revenues and reimbursable expenses | 769,023 | 701,533 | 602,751 | ||||||||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | |||||||||||
Direct costs | 401,915 | 384,277 | 323,398 | ||||||||
Amortization of intangible assets and software development costs | 16,788 | 4,590 | 2,660 | ||||||||
Reimbursable expenses | 69,932 | 73,855 | 64,665 | ||||||||
Total direct costs and reimbursable expenses | 488,635 | 462,722 | 390,723 | ||||||||
Operating expenses and other operating gains: | |||||||||||
Selling, general and administrative expenses | 157,902 | 132,799 | 116,976 | ||||||||
Restructuring charges | 3,329 | 2,811 | 305 | ||||||||
Litigation and other gains, net | (9,476 | ) | (590 | ) | (5,875 | ) | |||||
Depreciation and amortization | 25,135 | 15,451 | 10,723 | ||||||||
Total operating expenses and other operating gains | 176,890 | 150,471 | 122,129 | ||||||||
Operating income | 103,498 | 88,340 | 89,899 | ||||||||
Other income (expense), net: | |||||||||||
Interest expense, net of interest income | (18,136 | ) | (8,679 | ) | (6,475 | ) | |||||
Other income (expense), net | (1,797 | ) | 400 | 353 | |||||||
Total other expense, net | (19,933 | ) | (8,279 | ) | (6,122 | ) | |||||
Income from continuing operations before income tax expense | 83,565 | 80,061 | 83,777 | ||||||||
Income tax expense | 21,670 | 33,059 | 32,200 | ||||||||
Net income from continuing operations | 61,895 | 47,002 | 51,577 | ||||||||
Income (loss) from discontinued operations, net of tax | (2,843 | ) | 32,049 | 14,856 | |||||||
Net income | $ | 59,052 | $ | 79,051 | $ | 66,433 | |||||
Net earnings per basic share: | |||||||||||
Net income from continuing operations | $ | 2.80 | $ | 2.10 | $ | 2.31 | |||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.42 | 0.67 | |||||||
Net income | $ | 2.67 | $ | 3.52 | $ | 2.98 | |||||
Net earnings per diluted share: | |||||||||||
Net income from continuing operations | $ | 2.74 | $ | 2.05 | $ | 2.26 | |||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.40 | 0.66 | |||||||
Net income | $ | 2.61 | $ | 3.45 | $ | 2.92 | |||||
Weighted average shares used in calculating earnings per share: | |||||||||||
Basic | 22,136 | 22,431 | 22,322 | ||||||||
Diluted | 22,600 | 22,925 | 22,777 | ||||||||
Comprehensive income: | |||||||||||
Net income | $ | 59,052 | $ | 79,051 | $ | 66,433 | |||||
Foreign currency translation gain (loss), net of tax | 1,817 | (1,618 | ) | 89 | |||||||
Unrealized gain (loss) on investment, net of tax | 4,435 | (250 | ) | — | |||||||
Unrealized gain (loss) on cash flow hedging instruments, net of tax | (12 | ) | 10 | 473 | |||||||
Other comprehensive income (loss) | 6,240 | (1,858 | ) | 562 | |||||||
Comprehensive income | $ | 65,292 | $ | 77,193 | $ | 66,995 |
Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Stockholders' Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
Balance at December 31, 2012 | 23,904,125 | $ | 240 | (1,889,465 | ) | $ | (83,715 | ) | $ | 420,825 | $ | 109,330 | $ | (1,359 | ) | $ | 445,321 | ||||||||||||
Comprehensive income | 66,433 | 562 | 66,995 | ||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||
Restricted stock awards, net of cancellations | 508,477 | 5 | (82,674 | ) | (2,927 | ) | 2,922 | — | |||||||||||||||||||||
Exercise of stock options | 40,859 | — | 198 | 198 | |||||||||||||||||||||||||
Share-based compensation | 17,084 | 17,084 | |||||||||||||||||||||||||||
Shares redeemed for employee tax withholdings | (31,565 | ) | (1,449 | ) | (1,449 | ) | |||||||||||||||||||||||
Income tax benefit on share-based compensation | 2,115 | 2,115 | |||||||||||||||||||||||||||
Balance at December 31, 2013 | 24,453,461 | $ | 245 | (2,003,704 | ) | $ | (88,091 | ) | $ | 443,144 | $ | 175,763 | $ | (797 | ) | $ | 530,264 | ||||||||||||
Comprehensive income | 79,051 | (1,858 | ) | 77,193 | |||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||
Restricted stock awards, net of cancellations | 429,482 | 4 | (50,276 | ) | (2,330 | ) | 2,326 | — | |||||||||||||||||||||
Exercise of stock options | 38,042 | — | 857 | 857 | |||||||||||||||||||||||||
Share-based compensation | 20,118 | 20,118 | |||||||||||||||||||||||||||
Shares redeemed for employee tax withholdings | (55,336 | ) | (3,653 | ) | (3,653 | ) | |||||||||||||||||||||||
Income tax benefit on share-based compensation | 5,103 | 5,103 | |||||||||||||||||||||||||||
Equity component of convertible senior notes, net of tax and issuance costs | 22,739 | 22,739 | |||||||||||||||||||||||||||
Purchase of convertible senior note hedges, net of tax | (25,612 | ) | (25,612 | ) | |||||||||||||||||||||||||
Issuance of warrants | 23,625 | 23,625 | |||||||||||||||||||||||||||
Share repurchases | (805,392 | ) | (8 | ) | (49,992 | ) | (50,000 | ) | |||||||||||||||||||||
Balance at December 31, 2014 | 24,115,593 | $ | 241 | (2,109,316 | ) | $ | (94,074 | ) | $ | 442,308 | $ | 254,814 | $ | (2,655 | ) | $ | 600,634 | ||||||||||||
Comprehensive income | 59,052 | 6,240 | 65,292 | ||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||
Restricted stock awards, net of cancellations | 504,955 | 5 | (42,797 | ) | (2,506 | ) | 2,501 | — | |||||||||||||||||||||
Business acquisition | 28,486 | — | 2,204 | 2,204 | |||||||||||||||||||||||||
Share-based compensation | 22,484 | 22,484 | |||||||||||||||||||||||||||
Shares redeemed for employee tax withholdings | (109,967 | ) | (7,154 | ) | (7,154 | ) | |||||||||||||||||||||||
Income tax benefit on share-based compensation | 3,456 | 3,456 | |||||||||||||||||||||||||||
Share repurchases | (583,880 | ) | (5 | ) | (34,586 | ) | (34,591 | ) | |||||||||||||||||||||
Balance at December 31, 2015 | 24,065,154 | $ | 241 | (2,262,080 | ) | $ | (103,734 | ) | $ | 438,367 | $ | 313,866 | $ | 3,585 | $ | 652,325 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 59,052 | $ | 79,051 | $ | 66,433 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 58,053 | 30,989 | 23,609 | ||||||||
Share-based compensation | 21,487 | 20,130 | 18,347 | ||||||||
Amortization of debt discount and issuance costs | 9,329 | 3,832 | 1,363 | ||||||||
Allowances for doubtful accounts and unbilled services | 1,025 | 5,918 | 4,411 | ||||||||
Deferred income taxes | 2,765 | 8,096 | 4,683 | ||||||||
Loss on sale of business | 2,303 | — | — | ||||||||
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||||||||||
(Increase) decrease in receivables from clients | (2,836 | ) | 30,072 | (21,731 | ) | ||||||
(Increase) decrease in unbilled services | 31,696 | (38,211 | ) | (11,932 | ) | ||||||
(Increase) decrease in current income tax receivable / payable, net | 8,818 | (10,773 | ) | (5,027 | ) | ||||||
(Increase) decrease in other assets | (14,742 | ) | 2,324 | (174 | ) | ||||||
Increase (decrease) in accounts payable and accrued liabilities | 7,679 | 9,164 | 1,514 | ||||||||
Increase (decrease) in accrued payroll and related benefits | (25,221 | ) | 8,835 | 34,724 | |||||||
Increase (decrease) in deferred revenues | 4,859 | (2,974 | ) | (962 | ) | ||||||
Net cash provided by operating activities | 164,267 | 146,453 | 115,258 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (18,571 | ) | (25,913 | ) | (20,225 | ) | |||||
Investment in life insurance policies | (5,804 | ) | (1,775 | ) | (1,002 | ) | |||||
Purchases of businesses, net of cash acquired | (339,966 | ) | (53,971 | ) | (30,297 | ) | |||||
Purchases of convertible debt investment | (15,438 | ) | (12,500 | ) | — | ||||||
Capitalization of internally developed software | (866 | ) | — | (1,572 | ) | ||||||
Proceeds from note receivable | — | 328 | 438 | ||||||||
Proceeds from sale of business, net of cash sold | 108,487 | — | — | ||||||||
Net cash used in investing activities | (272,158 | ) | (93,831 | ) | (52,658 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | — | 857 | 198 | ||||||||
Shares redeemed for employee tax withholdings | (7,154 | ) | (3,653 | ) | (1,449 | ) | |||||
Tax benefit from share-based compensation | 3,588 | 5,107 | 2,354 | ||||||||
Share repurchases | (34,591 | ) | (50,000 | ) | — | ||||||
Proceeds from borrowings under credit facility | 314,000 | 129,000 | 96,000 | ||||||||
Repayments on credit facility | (365,750 | ) | (154,000 | ) | (119,750 | ) | |||||
Proceeds from convertible senior notes issuance | — | 250,000 | — | ||||||||
Proceeds from sale of warrants | — | 23,625 | — | ||||||||
Payments for convertible senior note hedges | — | (42,125 | ) | — | |||||||
Payments for debt issuance costs | — | (7,346 | ) | (1,155 | ) | ||||||
Payments of capital lease obligations | (48 | ) | (79 | ) | (19 | ) | |||||
Deferred payments for purchase of property and equipment | — | (471 | ) | (471 | ) | ||||||
Deferred acquisition payments | — | (4,745 | ) | (5,356 | ) | ||||||
Net cash provided by (used in) financing activities | (89,955 | ) | 146,170 | (29,648 | ) | ||||||
Effect of exchange rate changes on cash | (589 | ) | (51 | ) | 17 | ||||||
Net increase (decrease) in cash and cash equivalents | (198,435 | ) | 198,741 | 32,969 | |||||||
Cash and cash equivalents at beginning of the period | 256,872 | 58,131 | 25,162 | ||||||||
Cash and cash equivalents at end of the period | $ | 58,437 | $ | 256,872 | $ | 58,131 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Non-cash investing and financing activities: | |||||||||||
Property and equipment expenditures included in accounts payable and accrued expenses | $ | 2,089 | $ | 3,533 | $ | 4,548 | |||||
Contingent consideration related to business acquisitions | $ | 2,963 | $ | 816 | $ | — | |||||
Common stock issued related to business acquisitions | $ | 2,204 | $ | — | $ | — | |||||
Cash paid during the year for: | |||||||||||
Interest | $ | 9,274 | $ | 4,006 | $ | 4,912 | |||||
Income taxes | $ | 10,955 | $ | 31,815 | $ | 45,658 |
Fair value of consideration received | |||
Gross cash proceeds | $ | 112,000 | |
Estimated net working capital adjustment | 4,536 | ||
Transaction costs and other closing payments | (6,402 | ) | |
Total | $ | 110,134 |
December 31, 2014 | |||
Assets | |||
Current assets: | |||
Receivables from clients, net | $ | 22,150 | |
Unbilled services, net | 7,186 | ||
Prepaid expenses and other current assets | 3,027 | ||
Total current assets of discontinued operations | $ | 32,363 | |
Non-current assets: | |||
Property and equipment, net | $ | 13,986 | |
Other non-current assets | 1,078 | ||
Intangible assets, net | 2,955 | ||
Goodwill | 52,555 | ||
Total non-current assets of discontinued operations | $ | 70,574 | |
Liabilities | |||
Current liabilities: | |||
Accrued expenses and other current liabilities | 1,780 | ||
Total current liabilities of discontinued operations | $ | 1,780 | |
Non-current liabilities: | |||
Deferred compensation and other liabilities | $ | 503 | |
Total non-current liabilities of discontinued operations | $ | 503 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenues and reimbursable expenses: | |||||||||||
Revenues | $ | 139,430 | $ | 183,646 | $ | 182,394 | |||||
Reimbursable expenses | 3,148 | 4,028 | 2,644 | ||||||||
Total revenues and reimbursable expenses | 142,578 | 187,674 | 185,038 | ||||||||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | |||||||||||
Direct costs | 95,247 | 115,894 | 120,141 | ||||||||
Amortization of intangible assets and software development costs | 233 | 298 | 431 | ||||||||
Reimbursable expenses | 3,153 | 4,001 | 2,655 | ||||||||
Total direct costs and reimbursable expenses | 98,633 | 120,193 | 123,227 | ||||||||
Operating expenses and other operating gains: | |||||||||||
Selling, general and administrative expenses | 20,640 | 22,635 | 21,562 | ||||||||
Restructuring charges (1) | 13,341 | 627 | 456 | ||||||||
Other gains | (900 | ) | — | — | |||||||
Depreciation and amortization | 9,605 | 9,563 | 9,787 | ||||||||
Total operating expenses and other operating gains | 42,686 | 32,825 | 31,805 | ||||||||
Operating income | 1,259 | 34,656 | 30,006 | ||||||||
Other expense, net | (13 | ) | (109 | ) | (144 | ) | |||||
Income from discontinued operations before income tax expense | 1,246 | 34,547 | 29,862 | ||||||||
Loss on disposal | (2,303 | ) | — | — | |||||||
Total income (loss) from discontinued operations before income tax expense | (1,057 | ) | 34,547 | 29,862 | |||||||
Income tax expense (2) | 1,786 | 2,498 | 14,976 | ||||||||
Net income (loss) from discontinued operations | $ | (2,843 | ) | $ | 32,049 | $ | 14,886 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Depreciation and amortization | $ | 15,974 | $ | 9,861 | $ | 10,218 | |||||
Share-based compensation | $ | 2,215 | $ | 1,374 | $ | 2,299 | |||||
Purchases of property and equipment | $ | 6,234 | $ | 11,910 | $ | 6,888 | |||||
Significant noncash investing items of discontinued operations: | |||||||||||
Property and equipment expenditures included in accounts payable and accrued expenses | $ | — | $ | 1,464 | $ | 3,124 | |||||
Contingent consideration related to business acquisitions | $ | 900 | $ | — | $ | — |
Fair value of consideration transferred | |||
Cash | $ | 323,237 | |
Common stock | 2,204 | ||
Net working capital adjustment | (255 | ) | |
Total consideration transferred | $ | 325,186 |
Amount | |||
Assets acquired: | |||
Accounts receivable | $ | 14,906 | |
Prepaid expenses and other current assets | 1,385 | ||
Deferred income tax asset | 4,335 | ||
Property and equipment | 4,509 | ||
Intangible assets | 97,500 | ||
Liabilities assumed: | |||
Accounts payable | 760 | ||
Accrued expenses and other current liabilities | 2,868 | ||
Accrued payroll and related benefits | 1,574 | ||
Deferred revenues | 2,449 | ||
Deferred income tax liability | 21,263 | ||
Other non-current liabilities | 1,211 | ||
Total identifiable net assets | 92,510 | ||
Goodwill | 232,676 | ||
Total purchase price | $ | 325,186 |
Fair Value | Useful Life in Years | ||||
Customer relationships | $ | 42,400 | 9 | ||
Customer contracts | 25,100 | 4 | |||
Trade name | 22,800 | 5 | |||
Technology and software | 3,900 | 3 | |||
Publishing content | 3,300 | 3 | |||
Total intangible assets subject to amortization | $ | 97,500 |
For the Year Ended | ||||||||
December 31, | ||||||||
2015 | 2014 | |||||||
Revenues | $ | 709,813 | $ | 705,285 | ||||
Net income from continuing operations | $ | 63,600 | $ | 44,495 | ||||
Net income from continuing operations per share - basic | $ | 2.87 | $ | 1.98 | ||||
Net income from continuing operations per share - diluted | $ | 2.81 | $ | 1.94 |
Huron Healthcare | Huron Education and Life Sciences | Huron Business Advisory | Total | |||||||||||||
Balance as of December 31, 2013: | ||||||||||||||||
Goodwill | $ | 355,880 | $ | 111,504 | $ | 159,077 | $ | 626,461 | ||||||||
Accumulated impairment losses | — | — | (142,983 | ) | (142,983 | ) | ||||||||||
Goodwill, net as of December 31, 2013 | 355,880 | 111,504 | 16,094 | 483,478 | ||||||||||||
Goodwill recorded in connection with business combinations(1) | 21,708 | 8,308 | 1,489 | 31,505 | ||||||||||||
Goodwill reallocation(2) | — | (16,744 | ) | 16,744 | — | |||||||||||
Foreign currency translation | — | (162 | ) | (230 | ) | (392 | ) | |||||||||
Balance as of December 31, 2014: | ||||||||||||||||
Goodwill | 377,588 | 102,906 | 177,080 | 657,574 | ||||||||||||
Accumulated impairment losses | — | — | (142,983 | ) | (142,983 | ) | ||||||||||
Goodwill, net as of December 31, 2014 | $ | 377,588 | $ | 102,906 | $ | 34,097 | $ | 514,591 | ||||||||
Goodwill recorded in connection with business combinations(1) | 232,676 | — | 4,874 | 237,550 | ||||||||||||
Foreign currency translation | — | — | (741 | ) | (741 | ) | ||||||||||
Balance as of December 31, 2015: | ||||||||||||||||
Goodwill | 610,264 | 102,906 | 181,213 | 894,383 | ||||||||||||
Accumulated impairment losses | — | — | (142,983 | ) | (142,983 | ) | ||||||||||
Balance as of December 31, 2015(3) | $ | 610,264 | $ | 102,906 | $ | 38,230 | $ | 751,400 |
(1) | Refer to Note 4 "Acquisitions" for additional information on the goodwill recorded in connection with business combinations. |
(2) | During the first quarter of 2014, we reorganized our internal operating structure to better align our service offerings and moved our Enterprise Performance Management and Analytics (“EPM&A”) practice (formerly referred to as Blue Stone International, LLC, a business which we acquired during the fourth quarter of 2013) from the Huron Education and Life Sciences segment to the Huron Business Advisory segment. As a result of this change, we reassigned the goodwill balance of the EPM&A practice, which totaled $16.7 million as of March 31, 2014, from the Huron Education and Life Sciences reporting unit to the EPM&A reporting unit, which is part of the Huron Business Advisory segment. |
(3) | In connection with the sale of the Huron Legal segment in 2015, we wrote off $59.5 million of goodwill, which represents the Huron Legal segment goodwill carrying balance as of the closing date. Refer to Note 3 "Discontinued Operations" for additional information on the sale. |
December 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Useful Life in Years | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Customer contracts | 1 to 4 | $ | 25,332 | $ | 11,943 | $ | 243 | $ | 71 | ||||||||
Customer relationships | 5 to 13 | 79,449 | 22,360 | 33,586 | 15,168 | ||||||||||||
Non-competition agreements | 2 to 5 | 3,415 | 1,498 | 3,005 | 758 | ||||||||||||
Trade names | 5 | 22,800 | 5,396 | 40 | 27 | ||||||||||||
Technology and software | 3 | 4,180 | 1,324 | 4,321 | 3,461 | ||||||||||||
Publishing content | 3 | 3,300 | 963 | — | — | ||||||||||||
License | 2 | — | — | 50 | 31 | ||||||||||||
Total | $ | 138,476 | $ | 43,484 | $ | 41,245 | $ | 19,516 |
Year Ending December 31, | Estimated Amortization Expense | |||
2016 | $ | 29,082 | ||
2017 | $ | 25,069 | ||
2018 | $ | 14,987 | ||
2019 | $ | 9,427 | ||
2020 | $ | 5,830 |
December 31, | |||||||
2015 | 2014 | ||||||
Computers, related equipment, and software | $ | 48,033 | $ | 65,464 | |||
Leasehold improvements | 32,163 | 40,701 | |||||
Furniture and fixtures | 12,891 | 15,908 | |||||
Assets under capital lease | 409 | 925 | |||||
Assets under construction | 261 | 594 | |||||
Property and equipment | 93,757 | 123,592 | |||||
Accumulated depreciation and amortization | (64,869 | ) | (92,901 | ) | |||
Property and equipment, net | $ | 28,888 | $ | 30,691 |
December 31, | |||||||
2015 | 2014 | ||||||
1.25% convertible senior notes due 2019 | $ | 219,993 | $ | 212,852 | |||
Senior secured credit facility | 92,000 | 143,750 | |||||
Total debt | 311,993 | 356,602 | |||||
Current maturities of debt | — | (28,750 | ) | ||||
Long-term debt, net of current portion | $ | 311,993 | $ | 327,852 |
Scheduled Maturities of Long-Term Debt | |||
2016 | $ | — | |
2017 | $ | — | |
2018 | $ | — | |
2019 | $ | 250,000 | |
2020 | $ | 92,000 |
• | during any calendar quarter (and only during such calendar quarter) commencing after December 31, 2014 if, for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock for such trading day is equal to or greater than 130% of the applicable conversion price on such trading day; |
• | during the five consecutive business day period immediately following any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which, for each trading day of the measurement period, the “trading price” (as defined in the Indenture) per $1,000 principal amount of the Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock for such trading day and the applicable conversion rate on such trading day; or |
• | upon the occurrence of specified corporate transactions described in the Indenture. |
December 31, | |||||||
2015 | 2014 | ||||||
Liability component: | |||||||
Proceeds | $ | 250,000 | $ | 250,000 | |||
Less: debt discount, net of amortization | (30,007 | ) | (37,148 | ) | |||
Net carrying amount | $ | 219,993 | $ | 212,852 | |||
Equity component(1) | $ | 39,287 | $ | 39,287 |
Year Ended December 31, | |||||||
2015 | 2014 | ||||||
Contractual interest coupon | $ | 3,125 | $ | 964 | |||
Amortization of debt issuance costs | 1,180 | 360 | |||||
Amortization of debt discount | 7,141 | 2,139 | |||||
Total interest expense recognized | $ | 11,446 | $ | 3,463 |
• | Convertible Note Hedge Transactions. In connection with the issuance of the Convertible Notes, the Company entered into the convertible note hedge transactions whereby the Company has call options to purchase a total of approximately 3.1 million shares of the Company’s common stock, which is the number of shares initially issuable upon conversion of the Convertible Notes in full, at a price of approximately $79.89, which corresponds to the initial conversion price of the Convertible Notes, subject to customary anti-dilution adjustments substantially similar to those in the Convertible Notes. The convertible note hedge transactions are exercisable upon conversion of the Convertible Notes and will expire in 2019 if not earlier exercised. We paid an aggregate amount of $42.1 million for the convertible note hedge transactions, which was recorded as additional paid-in capital in the consolidated balance sheets. The convertible note hedge transactions are separate transactions and are not part of the terms of the Convertible Notes. |
• | Warrants. In connection with the issuance of the Convertible Notes, the Company sold warrants whereby the holders of the warrants have the option to purchase a total of approximately 3.1 million shares of the Company’s common stock at a strike price of approximately $97.12. The warrants will expire incrementally on 100 different dates from January 6, 2020 to May 28, 2020 and are exercisable at each such expiry date. If the average market value per share of our common stock for the reporting period exceeds the strike price of the warrants, the warrants will have a dilutive effect on our earnings per share. We received aggregate proceeds of $23.6 million from the sale of the warrants, which was recorded as additional paid-in capital in the consolidated balance sheets. The warrants are separate transactions and are not part of the terms of the Convertible Notes or the convertible note hedge transactions. |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Net income from continuing operations | $ | 61,895 | $ | 47,002 | $ | 51,577 | |||||
Income (loss) from discontinued operations, net of tax | (2,843 | ) | 32,049 | 14,856 | |||||||
Net income | $ | 59,052 | $ | 79,051 | $ | 66,433 | |||||
Weighted average common shares outstanding—basic | 22,136 | 22,431 | 22,322 | ||||||||
Weighted average common stock equivalents | 464 | 494 | 455 | ||||||||
Weighted average common shares outstanding—diluted | 22,600 | 22,925 | 22,777 | ||||||||
Net earnings per basic share: | |||||||||||
Net income from continuing operations | $ | 2.80 | $ | 2.10 | $ | 2.31 | |||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.42 | 0.67 | |||||||
Net income | $ | 2.67 | $ | 3.52 | $ | 2.98 | |||||
Net earnings per diluted share: | |||||||||||
Net income from continuing operations | $ | 2.74 | $ | 2.05 | $ | 2.26 | |||||
Income (loss) from discontinued operations, net of tax | (0.13 | ) | 1.40 | 0.66 | |||||||
Net income | $ | 2.61 | $ | 3.45 | $ | 2.92 |
As of December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Unvested restricted stock awards | 21 | 17 | — | |||||
Outstanding common stock options | — | — | 76 | |||||
Convertible senior notes | 3,129 | 3,129 | — | |||||
Warrants related to the issuance of convertible senior notes | 3,129 | 3,129 | — | |||||
Total anti-dilutive securities | 6,279 | 6,275 | 76 |
Employee Costs | Office Space Reductions | Total | |||||||||
Balance as of December 31, 2013 | $ | 98 | $ | 752 | $ | 850 | |||||
Additions (1)(2) | 188 | 2,837 | 3,025 | ||||||||
Payments | (280 | ) | (1,385 | ) | (1,665 | ) | |||||
Adjustments | — | — | — | ||||||||
Balance as of December 31, 2014 | 6 | 2,204 | 2,210 | ||||||||
Additions (1)(2) | 7,209 | 5,820 | 13,029 | ||||||||
Payments | (4,938 | ) | (2,014 | ) | (6,952 | ) | |||||
Adjustments (3) | 46 | 369 | 415 | ||||||||
Balance as of December 31, 2015 | $ | 2,323 | $ | 6,379 | $ | 8,702 |
(1) | Additions for the years ended December 31, 2015 and 2014 include $10.2 million and $0.4 million, respectively, related to discontinued operations. Refer to Note 3 "Discontinued Operations" for additional information on our discontinued operation. |
(2) | Additions for the years ended December 31, 2015 and 2014 exclude $3.5 million and $0.2 million, respectively, of net noncash restructuring charges as these items do not result in a restructuring charge liability. |
(3) | Adjustments to office space reductions represents changes in sublease assumptions and reductions in our remaining lease obligations. |
Fair Value (Derivative Asset and Liability) December 31, | |||||||
Balance Sheet Location | 2015 | 2014 | |||||
Other non-current assets | $ | 86 | $ | 516 | |||
Accrued expenses | $ | 242 | $ | 643 | |||
Deferred compensation and other liabilities | $ | — | $ | 10 |
Level 1 Inputs | Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |
Level 2 Inputs | Quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |
Level 3 Inputs | Unobservable inputs for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
December 31, 2015 | |||||||||||||||
Assets: | |||||||||||||||
Promissory note | $ | — | $ | — | $ | 2,309 | $ | 2,309 | |||||||
Convertible debt investment | — | — | 34,831 | 34,831 | |||||||||||
Total assets | $ | — | $ | — | $ | 37,140 | $ | 37,140 | |||||||
Liabilities: | |||||||||||||||
Interest rate swaps | $ | — | $ | 156 | $ | — | $ | 156 | |||||||
Contingent consideration for business acquisitions | — | — | 2,063 | 2,063 | |||||||||||
Total liabilities | $ | — | $ | 156 | $ | 2,063 | $ | 2,219 | |||||||
December 31, 2014 | |||||||||||||||
Assets: | |||||||||||||||
Promissory note | $ | — | $ | — | $ | 2,137 | $ | 2,137 | |||||||
Interest rate swaps | — | 172 | — | 172 | |||||||||||
Convertible debt investment | — | — | 12,250 | 12,250 | |||||||||||
Total assets | $ | — | $ | 172 | $ | 14,387 | $ | 14,559 | |||||||
Liabilities: | |||||||||||||||
Interest rate swaps | $ | — | $ | 309 | $ | — | $ | 309 | |||||||
Contingent consideration for business acquisitions | — | — | 226 | 226 | |||||||||||
Total liabilities | $ | — | $ | 309 | $ | 226 | $ | 535 |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
1.25% convertible senior notes due 2019 | $ | 219,993 | $ | 248,010 | $ | 212,852 | $ | 261,903 |
Foreign Currency Translation | Available-for- Sale Investments | Cash Flow Hedges(1) | Total | ||||||||||||
Balance as of December 31, 2012 | $ | (805 | ) | $ | — | $ | (554 | ) | $ | (1,359 | ) | ||||
Foreign currency translation adjustment, net of tax of $48 | 89 | — | — | 89 | |||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||
Change in fair value, net of tax of $(83) | — | — | 139 | 139 | |||||||||||
Reclassification adjustment into earnings, net of tax of $(223) | — | — | 334 | 334 | |||||||||||
Balance as of December 31, 2013 | (716 | ) | — | (81 | ) | (797 | ) | ||||||||
Foreign currency translation adjustment, net of tax of $111 | (1,618 | ) | — | — | (1,618 | ) | |||||||||
Unrealized loss on investments, net of tax of $0 | — | (250 | ) | — | (250 | ) | |||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||
Change in fair value, net of tax of $341 | — | — | (510 | ) | (510 | ) | |||||||||
Reclassification adjustment into earnings, net of tax of $(347) | — | — | 520 | 520 | |||||||||||
Balance as of December 31, 2014 | (2,334 | ) | (250 | ) | (71 | ) | (2,655 | ) | |||||||
Foreign currency translation adjustment, net of tax of $(33) | (403 | ) | — | — | (403 | ) | |||||||||
Reclassification adjustment into earnings, net of tax of $0 (2) | 2,220 | 2,220 | |||||||||||||
Unrealized gain on investments, net of tax of $(2,709) | — | 4,435 | — | 4,435 | |||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||
Change in fair value, net of tax of $327 | — | — | (492 | ) | (492 | ) | |||||||||
Reclassification adjustment into earnings, net of tax of $(320) | — | — | 480 | 480 | |||||||||||
Balance as of December 31, 2015 | $ | (517 | ) | $ | 4,185 | $ | (83 | ) | $ | 3,585 |
(1) | The before tax amounts reclassified from accumulated other comprehensive income (loss) related to our cash flow hedges are recorded to interest expense, net of interest income. |
(2) | In connection with the divestiture of Huron Legal, which included the sale of certain wholly-owned foreign subsidiaries, we reclassified $2.2 million of accumulated translation losses to net income from discontinued operations. |
2013 | |
Expected dividend yield | —% |
Expected volatility | 45.0% |
Risk-free rate | 1.1% |
Expected option life (in years) | 6.25 |
Number of Options (in thousands) | Weighted Average Exercise Price (in dollars) | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
Outstanding at December 31, 2014 | 199 | $ | 28.99 | 6.3 | $ | 7.8 | ||||||
Granted | — | |||||||||||
Exercised | — | |||||||||||
Forfeited or expired | — | |||||||||||
Outstanding at December 31, 2015 | 199 | $ | 28.99 | 5.3 | $ | 6.1 | ||||||
Exercisable at December 31, 2015 | 173 | $ | 27.53 | 5.0 | $ | 5.5 |
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value (in dollars) | |||||
Nonvested restricted stock at December 31, 2014 | 780 | $ | 50.61 | |||
Granted | 307 | $ | 66.21 | |||
Vested | (363 | ) | $ | 46.57 | ||
Forfeited | (56 | ) | $ | 57.40 | ||
Nonvested restricted stock at December 31, 2015 | 668 | $ | 59.41 |
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value (in dollars) | |||||
Nonvested performance-based stock at December 31, 2014 | 236 | $ | 55.55 | |||
Granted (1) | 162 | $ | 66.63 | |||
Vested | (98 | ) | $ | 47.67 | ||
Forfeited (2) | (66 | ) | $ | 66.21 | ||
Nonvested performance-based stock at December 31, 2015 (3) | 234 | $ | 63.54 |
(1) | Shares granted in 2015 are presented at the stated target level, which represents the base number of shares that could be earned. Actual shares earned may be below or, for certain grants, above the target level based on the achievement of specific financial goals. Included in the granted shares amount are 8,100 shares earned above the target level for awards granted in 2014. |
(2) | Forfeited shares includes shares forfeited as a result of not meeting the performance criteria of the award as well as shares forfeited upon termination. |
(3) | Of the 234,000 nonvested performance-based shares outstanding as of December 31, 2015, 178,100 shares were unearned and subject to achievement of specific financial goals. Once earned, the awards will be subject to time-based vesting according to the terms of the award. Based on 2015 financial results, 111,041 shares that were granted in 2015 will be forfeited in the first quarter of 2016. |
Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 4,806 | $ | 16,361 | $ | 19,760 | |||||
State | 2,380 | 4,881 | 4,642 | ||||||||
Foreign | 350 | (175 | ) | (205 | ) | ||||||
Total current | 7,536 | 21,067 | 24,197 | ||||||||
Deferred: | |||||||||||
Federal | 12,450 | 10,637 | 6,953 | ||||||||
State | 1,482 | 1,170 | 995 | ||||||||
Foreign | 202 | 185 | 55 | ||||||||
Total deferred | 14,134 | 11,992 | 8,003 | ||||||||
Income tax expense for continuing operations | $ | 21,670 | $ | 33,059 | $ | 32,200 |
Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
U.S. | $ | 85,164 | $ | 83,851 | $ | 88,664 | |||||
Foreign | (1,599 | ) | (3,790 | ) | (4,887 | ) | |||||
Total | $ | 83,565 | $ | 80,061 | $ | 83,777 |
Year ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Percent of pretax income from continuing operations: | ||||||||
At U.S. statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 4.6 | 4.5 | 3.9 | |||||
Meals and entertainment | 0.6 | 0.6 | 0.5 | |||||
Valuation allowance | 0.5 | 1.2 | 0.6 | |||||
Foreign source income | 0.5 | 0.9 | 0.2 | |||||
Tax credits / Section 199 Deduction | (1.0 | ) | (0.9 | ) | (1.1 | ) | ||
Net tax (benefit) expense related to “check-the-box” election | (14.7 | ) | 0.4 | — | ||||
Other | 0.4 | (0.4 | ) | (0.7 | ) | |||
Effective income tax expense rate for continuing operations | 25.9 | % | 41.3 | % | 38.4 | % |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Share-based compensation | $ | 10,234 | $ | 10,234 | |||
Accrued payroll and other liabilities | 9,074 | 8,215 | |||||
Deferred lease incentives | 4,691 | 6,143 | |||||
Convertible note hedge transactions | 12,690 | 15,582 | |||||
Revenue recognition | 1,611 | 2,074 | |||||
Net operating loss carry-forwards | 529 | 2,069 | |||||
Tax credits | 1,935 | 1,182 | |||||
Other | 3,632 | 1,084 | |||||
Total deferred tax assets | 44,396 | 46,583 | |||||
Valuation allowance | (2,242 | ) | (2,431 | ) | |||
Net deferred tax assets | 42,154 | 44,152 | |||||
Deferred tax liabilities: | |||||||
Prepaid expenses | (2,943 | ) | (3,316 | ) | |||
Property and equipment | (2,406 | ) | (4,037 | ) | |||
Intangibles and Goodwill | (56,584 | ) | (33,288 | ) | |||
Convertible note discount | (11,793 | ) | (14,562 | ) | |||
Other | (3,116 | ) | (926 | ) | |||
Total deferred tax liabilities | (76,842 | ) | (56,129 | ) | |||
Net deferred tax liability for continuing operations | (34,688 | ) | (11,977 | ) |
Balance at January 1, 2012 | $ | 441 | |
Additions based on tax positions related to the prior years | 40 | ||
Decrease based on tax positions related to the prior year | (51 | ) | |
Decrease based on settlements with taxing authorities | (19 | ) | |
Balance at December 31, 2013 | $ | 411 | |
Additions based on tax positions related to the current year | 2,410 | ||
Decrease based on tax positions related to the prior year | (333 | ) | |
Balance at December 31, 2014 | $ | 2,488 | |
Additions based on tax positions related to the current year | 735 | ||
Balance at December 31, 2015 | $ | 3,223 |
Operating Lease Obligations | Sublease Income | |||||||
2016 | $ | 16,896 | $ | 2,943 | ||||
2017 | 12,392 | 1,141 | ||||||
2018 | 10,795 | 945 | ||||||
2019 | 8,345 | — | ||||||
2020 | 8,112 | — | ||||||
Thereafter | 26,505 | — | ||||||
Total | $ | 83,045 | $ | 5,029 |
• | Huron Healthcare |
• | Huron Education and Life Sciences |
• | Huron Business Advisory |
• | All Other |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Huron Healthcare: | |||||||||||
Revenues | $ | 446,887 | $ | 415,803 | $ | 358,766 | |||||
Operating income | $ | 169,560 | $ | 159,015 | $ | 141,870 | |||||
Segment operating income as a percentage of segment revenues | 37.9 | % | 38.2 | % | 39.5 | % | |||||
Huron Education and Life Sciences: | |||||||||||
Revenues | $ | 167,933 | $ | 145,962 | $ | 143,609 | |||||
Operating income | $ | 44,216 | $ | 36,131 | $ | 35,966 | |||||
Segment operating income as a percentage of segment revenues | 26.3 | % | 24.8 | % | 25.0 | % | |||||
Huron Business Advisory: | |||||||||||
Revenues | $ | 82,968 | $ | 62,840 | $ | 34,669 | |||||
Operating income | $ | 19,263 | $ | 14,035 | $ | 7,211 | |||||
Segment operating income as a percentage of segment revenues | 23.2 | % | 22.3 | % | 20.8 | % | |||||
All Other: | |||||||||||
Revenues | $ | 1,222 | $ | 3,081 | $ | 1,084 | |||||
Operating loss | $ | (1,718 | ) | $ | (2,466 | ) | $ | (1,256 | ) | ||
Segment operating loss as a percentage of segment revenues | N/M | N/M | N/M | ||||||||
Total Company: | |||||||||||
Revenues | $ | 699,010 | $ | 627,686 | $ | 538,128 | |||||
Reimbursable expenses | 70,013 | 73,847 | 64,623 | ||||||||
Total revenues and reimbursable expenses | $ | 769,023 | $ | 701,533 | $ | 602,751 | |||||
Statements of Earnings reconciliation: | |||||||||||
Segment operating income | $ | 231,321 | $ | 206,715 | $ | 183,791 | |||||
Items not allocated at the segment level: | |||||||||||
Other operating expenses and gains | 102,688 | 102,924 | 83,169 | ||||||||
Depreciation and amortization expense | 25,135 | 15,451 | 10,723 | ||||||||
Other expense, net | 19,933 | 8,279 | 6,122 | ||||||||
Income from continuing operations before income tax expense | $ | 83,565 | $ | 80,061 | $ | 83,777 |
December 31, | ||||||||
Segment Assets: | 2015 | 2014 | ||||||
Huron Healthcare | $ | 84,088 | $ | 112,190 | ||||
Huron Education and Life Sciences | 35,916 | 28,973 | ||||||
Huron Business Advisory | 21,885 | 19,134 | ||||||
All Other | — | 379 | ||||||
Unallocated assets (1) | 1,022,271 | 995,238 | ||||||
Total assets | $ | 1,164,160 | $ | 1,155,914 |
(1) | Unallocated assets includes goodwill and intangible assets, our convertible debt investment, and assets of discontinued operations, as management does not evaluate these items at the segment level when assessing segment performance or allocating resources. See Note 5 “Goodwill and Intangible Assets,” Note 12 "Fair Value of Financial Instruments," and Note 3 “Discontinued Operations” for further information on these assets. |
Beginning balance | Additions(1) | Deductions | Ending balance | ||||||||||
Year ended December 31, 2013: | |||||||||||||
Allowances for doubtful accounts and unbilled services | $ | 6,675 | 28,948 | 25,698 | $ | 9,925 | |||||||
Valuation allowance for deferred tax assets | $ | 1,290 | 116 | — | $ | 1,406 | |||||||
Year ended December 31, 2014: | |||||||||||||
Allowances for doubtful accounts and unbilled services | $ | 9,925 | 36,044 | 31,840 | $ | 14,129 | |||||||
Valuation allowance for deferred tax assets | $ | 1,406 | 1,025 | — | $ | 2,431 | |||||||
Year ended December 31, 2015: | |||||||||||||
Allowances for doubtful accounts and unbilled services | $ | 14,129 | 40,003 | 37,246 | $ | 16,886 | |||||||
Valuation allowance for deferred tax assets | $ | 2,431 | 1,212 | 1,401 | $ | 2,242 |
(1) | Additions to allowances for doubtful accounts and unbilled services are charged to revenues to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client’s inability to make required payments on accounts receivables, the provision is charged to operating expenses. Additions also include allowances acquired in business acquisitions, which were not material in any period presented. |
Quarter Ended | |||||||||||||||
2015 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||
Revenues | $ | 154,426 | $ | 184,019 | $ | 175,465 | $ | 185,100 | |||||||
Reimbursable expenses | 16,308 | 20,867 | 16,091 | 16,747 | |||||||||||
Total revenues and reimbursable expenses | 170,734 | 204,886 | 191,556 | 201,847 | |||||||||||
Gross profit | 50,479 | 77,793 | 76,160 | 75,956 | |||||||||||
Operating income | 7,936 | 28,797 | 30,056 | 36,709 | |||||||||||
Net income from continuing operations | 968 | 14,148 | 14,277 | 32,502 | |||||||||||
Income (loss) from discontinued operations, net of tax | 534 | 4,685 | 5,097 | (13,159 | ) | ||||||||||
Net income | 1,502 | 18,833 | 19,374 | 19,343 | |||||||||||
Net earnings per basic share: | |||||||||||||||
Net income from continuing operations | $ | 0.04 | $ | 0.64 | $ | 0.65 | $ | 1.47 | |||||||
Income (loss) from discontinued operations, net of tax | 0.03 | 0.21 | 0.23 | (0.59 | ) | ||||||||||
Net income | $ | 0.07 | $ | 0.85 | $ | 0.88 | $ | 0.88 | |||||||
Net earnings per diluted share: | |||||||||||||||
Net income from continuing operations | $ | 0.04 | $ | 0.62 | $ | 0.63 | $ | 1.44 | |||||||
Income (loss) from discontinued operations, net of tax | 0.03 | 0.21 | 0.23 | (0.58 | ) | ||||||||||
Net income | $ | 0.07 | $ | 0.83 | $ | 0.86 | $ | 0.86 | |||||||
Weighted average shares used in calculating earnings per share: | |||||||||||||||
Basic | 22,126 | 22,220 | 22,107 | 22,093 | |||||||||||
Diluted | 22,602 | 22,654 | 22,592 | 22,551 |
Quarter Ended | |||||||||||||||
2014 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||
Revenues | $ | 155,756 | $ | 156,109 | $ | 151,904 | $ | 163,917 | |||||||
Reimbursable expenses | 18,617 | 19,907 | 17,689 | 17,634 | |||||||||||
Total revenues and reimbursable expenses | 174,373 | 176,016 | 169,593 | 181,551 | |||||||||||
Gross profit | 66,832 | 62,704 | 50,862 | 58,413 | |||||||||||
Operating income | 32,060 | 21,517 | 13,130 | 21,633 | |||||||||||
Net income from continuing operations | 17,094 | 12,473 | 7,467 | 9,968 | |||||||||||
Income from discontinued operations, net of tax | 17,032 | 7,440 | 4,752 | 2,825 | |||||||||||
Net income | 34,126 | 19,913 | 12,219 | 12,793 | |||||||||||
Net earnings per basic share: | |||||||||||||||
Net income from continuing operations | $ | 0.76 | $ | 0.55 | $ | 0.33 | $ | 0.45 | |||||||
Income from discontinued operations, net of tax | 0.75 | 0.33 | 0.21 | 0.13 | |||||||||||
Net income | $ | 1.51 | $ | 0.88 | $ | 0.54 | $ | 0.58 | |||||||
Net earnings per diluted share: | |||||||||||||||
Net income from continuing operations | $ | 0.74 | $ | 0.54 | $ | 0.33 | $ | 0.44 | |||||||
Income from discontinued operations, net of tax | 0.74 | 0.32 | 0.20 | 0.13 | |||||||||||
Net income | $ | 1.48 | $ | 0.86 | $ | 0.53 | $ | 0.57 | |||||||
Weighted average shares used in calculating earnings per share: | |||||||||||||||
Basic | 22,588 | 22,645 | 22,488 | 22,010 | |||||||||||
Diluted | 23,086 | 23,098 | 22,975 | 22,548 |
1. | History and Purpose. Huron Consulting Group Inc., a Delaware corporation (“Huron”), previously established the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan (the “Plan”) to attract and retain employees, non-employee directors and independent contractors providing services to Huron and/or the Affiliates, to motivate Participants to achieve long-term goals of Huron and the Affiliates, to provide incentive compensation opportunities that are competitive with those of other corporations, and to further align Participants’ interests with those of Huron’s stockholders, and thereby to promote the long-term financial interest of Huron and the Affiliates, including growth in value of Huron’s equity and enhancement of long-term stockholder value. The Plan has been previously amended and the following provisions constitute an amendment, restatement and continuation of the Plan effective as of May 2, 2014. |
2. | Definitions. As used in the Plan, the following definitions apply to the terms indicated below: |
(a) | “Administrative Actions” shall have the meaning set forth in Section 5(d). |
(b) | “Affiliate” means any corporation, partnership, joint venture or other entity during any period in which (i) Huron, directly or indirectly, owns at least 50% of the combined voting power of all classes of stock of such entity or at least 50% of the ownership interests in such entity or (ii) such entity, directly or indirectly, owns at least 50% of the combined voting power of all classes of stock of Huron. |
(c) | “Agreement” shall mean an agreement between Huron and a Participant evidencing an Award or a notice of an Award, in a form approved by the Committee. |
(d) | “Alternative Agreement” shall mean, with respect to any Participant, an employment agreement, senior management agreement or other written agreement describing the Participant’s terms of employment with Huron or an Affiliate. |
(e) | “Award” shall mean any award described in Section 7 or 8 of the Plan. |
(f) | “Board of Directors” shall mean the Board of Directors of Huron. |
(g) | “Business Criteria” shall mean (i) return on total stockholder equity; (ii) earnings or book value per share of Common Stock (“EPS”); (iii) |
(h) | adjusted EPS; (iv) net income (before or after taxes); (v) earnings before all or any interest, taxes, depreciation and/or amortization (“EBIT”, “EBITA” or “EBITDA”) measured as a dollar amount or a percentage of revenue; (vi) return on assets, capital or investment; (vii) market share; (viii) market capitalization (ix) cost reduction goals; (x) levels of expense, costs or liabilities; (xi) department, division or business unit level performance; (xii) operating income; (xiii) sales or revenues; (xiv) stock price appreciation; (xv) total stockholder return (TSR); (xvi) implementation or completion of critical projects or processes; (xvii) adjusted EBITDA; (xviii) days sales outstanding (DSO); (xix) financial coverage ratios; (xx) other non-GAAP financial measures, or (xxi) any combination of the foregoing. Where applicable, Business Criteria may be applied to results including or excluding discontinued operations, expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of Huron, an Affiliate, or a department, division or strategic business unit of Huron and/or one or more Affiliates, or may be applied to the performance of Huron and/or one or more Affiliates relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Business Criteria may be subject to a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). Each of the Business Criteria shall be determined, where applicable, in accordance with generally accepted accounting principles and shall be subject to certification by the Committee; provided that the Committee shall have the authority to make equitable adjustments to the Business Criteria applicable to any Award in recognition of (1) unusual or non-recurring events affecting Huron or any Affiliate or the financial statements of Huron or any Affiliate, (2) changes in applicable laws or regulations (including tax laws, accounting principles or other laws or provisions affecting reported results), (3) gains, losses or expenses determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles, (4) asset write-downs, (5) litigation, claim judgments, settlements or restatement related expenses, (6) accruals for reorganization and restructuring programs, (7) acquisitions or divestitures (including expenses related thereto), and (8) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management. To the extent that such inclusions or exclusions affect Awards to Covered Employees which are intended to qualify as “performance-based compensation” within the meaning of |
(i) | “Cash Incentive Award” shall mean the grant of a right to receive a payment of cash (or, in the discretion of the Committee, shares of Common Stock having value equivalent to the cash otherwise payable) that is contingent on achievement of performance objectives or other conditions over a specified period established by the Committee. The grant of Cash Incentive Awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Committee, including provisions relating to deferred payment. |
(j) | “Cause” shall mean, unless otherwise defined in a Participant’s Agreement or an Alternative Agreement, any of the following actions or failures by the Participant, as determined in the reasonable judgment of Huron: (i) engaging in conduct that violates written policies of Huron or any Affiliate; (ii) failure to perform the essential functions of his or her job (except for a failure resulting from a bona fide illness or incapacity); (iii) failure to carry out the reasonable directions of Huron or any Affiliate, issued through Huron’s Chief Executive Officer, the Board of Directors, other appropriate senior employee responsible for the Participant’s business unit or area, the Participant’s supervisor, or the person to whom the Participant reports, (iv) embezzlement, misappropriation of corporate funds, any act of fraud, dishonesty or self-dealing, or the commission of a felony or any significant violation of any statutory or common law duty of loyalty to Huron or any Affiliate; (v) an act or omission that could adversely and materially affect the business or reputation of Huron or any Affiliate or involves moral turpitude; or (vi) a breach of a material provision of this Plan, the Agreement evidencing an Award or an Alternate Agreement. |
(k) | “Change of Control” shall mean the first to occur of the following events: |
(i) | any Person becomes the Beneficial Owner, directly or indirectly, of Common Stock or voting securities of Huron (not including in the amounts beneficially owned by such Person any Common Stock or voting securities acquired directly from Huron or the Affiliates) representing 40% or more of the combined voting power of Huron’s then outstanding securities; |
(ii) | there is consummated a merger or consolidation of Huron or any direct or indirect subsidiary of Huron with any Person, other than (1) a merger or consolidation which would result in the voting securities of Huron outstanding immediately prior to such merger |
(iii) | the stockholders of Huron approve a plan of complete liquidation or dissolution of Huron (except for a plan of liquidation or dissolution effected to implement a recapitalization of Huron addressed in paragraph (ii) above); or |
(iv) | there is consummated an agreement for the sale or disposition of all or substantially all of the assets of Huron to a Person, other than a sale or disposition by Huron of all or substantially all of the assets of Huron to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of Huron. |
(l) | “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. |
(m) | “Committee” shall mean a committee of the Board of Directors consisting of two or more persons each of whom shall qualify as an “outside director” within the meaning of Section 162(m) of the Code, a “nonemployee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, and an “independent director” within the meaning of the NASD Rule 4350(c)(1). |
(n) | “Common Stock” shall mean the common stock of Huron, par value $.01 per share. |
(o) | “Covered Employee” shall have the meaning set forth in Section 162(m) of the Code. |
(p) | “Disabled” shall mean permanently and totally disabled within the meaning of Section 22(e)(3) of the Code. |
(q) | “Effective Date” shall have the meaning set forth in Section 3. |
(r) | “Eligible Individuals” shall mean employees of Huron or any of the Affiliates (including officers, whether or not they are directors of Huron or any Affiliate), independent contractors providing services to Huron or any Affiliate and non-employee directors of Huron or any Affiliate. |
(s) | “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. |
(t) | “Exercise Price” shall have the meaning set forth in Section 7(d). |
(u) | “Fair Market Value” of a share of Common Stock as of any date shall mean the value determined in accordance with the following rules: |
(i) | If the Common Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value shall be the closing price per share of Common Stock on the trading day immediately preceding such date on the principal exchange on which the Common Stock is then listed or admitted to trading or, if no such |
(ii) | If the Common Stock is not at the time listed or admitted to trading on a stock exchange but bid and asked prices for the Common Stock are regularly reported, then the Fair Market Value shall be the arithmetic mean between the closing or last bid and asked prices for the Common Stock on the trading day immediately preceding such date or, if no bid and asked prices for Common Stock are reported on such preceding date, on the most recent day immediately prior thereto on which bid and asked prices were so reported. |
(iii) | If the Common Stock is not listed or admitted to trading on any stock exchange and if prices are not regularly reported for the Common Stock as described in paragraph (ii), the Fair Market Value shall be as determined by the Committee in good faith in its sole discretion or under procedures established by the Committee, whose determination shall be conclusive and binding. |
(iv) | For purposes of determining the Fair Market Value of shares of Common Stock that are sold pursuant to a broker-assisted cashless exercise program, Fair Market Value shall be the price at which such shares are sold. |
(v) | “Full Value Award” shall mean an Award that is granted pursuant to Section 8 hereof and that is the grant of one or more shares of Common Stock or a right to receive one or more shares of Common Stock in the future, which grant may be subject to one or more of the following, as determined by the Committee: |
(i) | The grant may be in consideration of a Participant’s previously performed services or surrender of other compensation that may be due. |
(ii) | The grant may be contingent on the achievement of performance or other objectives during a specified period. |
(iii) | The grant may be subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the Participant or achievement of performance or other objectives. |
(w) | “Huron” shall have the meaning set forth in Section 1. |
(x) | “Incentive Stock Option” shall mean an Option that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code, or any successor provision, and which is designated by the Committee as an Incentive Stock Option. |
(y) | “Nonqualified Stock Option” shall mean an Option other than an Incentive Stock Option. |
(z) | “Option” shall mean an Award that is granted pursuant to Section 7 hereof that entitles a Participant to purchase shares of Common Stock at the applicable Exercise Price established by the Committee. |
(aa) | “Participant” shall mean an Eligible Individual to whom an Award is granted pursuant to the Plan. |
(bb) | “Performance-Based Compensation” shall have the meaning set forth in Section 9. |
(cc) | “Plan” shall mean the Huron Consulting Group Inc. 2012 Omnibus Incentive Plan as set forth herein. |
(dd) | “Retirement” shall mean the voluntary termination with Huron and the Affiliates of a Participant who is in the position of corporate vice president, managing director or executive officer and (i) such termination occurs on or after the date on which he or she has attained age 62 and completed at least seven years of employment with Huron and (ii) in conjunction with such termination such Participant has executed a non-competition and non-solicitation agreement provided by Huron. A Participant’s termination of employment shall not be considered to be on account of Retirement if the employment is terminated by Huron or any Affiliate for any reason. |
(ee) | “Stock Appreciation Right” shall mean an Award is granted pursuant to Section 7 hereof that entitles a Participant to receive, upon exercise of the Award, an amount of cash or shares of Common Stock (as determined in accordance with the terms of the Plan and the Award) having a value equal to the excess of: (i) the Fair Market Value, determined at the time of exercise, of a specified number of shares of Common Stock; over (ii) the applicable Exercise Price. |
(ff) | “Subsidiary” shall mean a “subsidiary corporation” of Huron within the meaning of Section 424(f) of the Code. |
3. | Effective Date and Duration of Plan. The Plan, as amended and restated, will be effective as of the date (the “Effective Date”) that it is approved by the Board of Directors, subject to approval by Huron’s stockholders. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any shares of Common Stock awarded under it are outstanding and not fully vested; provided, however, that no new Awards will be made under the Plan on or after the tenth anniversary of the Effective Date. |
4. | Shares Reserved and Other Limitations. |
(a) | Source of Shares. Shares of Common Stock reserved for issuance under the Plan may be authorized but unissued shares of Common Stock or authorized and issued shares of Common Stock held in Huron’s treasury, including shares purchased in the open market or in private transactions. |
(b) | Shares Available for Awards. Subject to the terms and conditions of the Plan, the number of shares of Common Stock reserved for issuance under the Plan shall be 2,248,204 shares (subject to adjustment as provided herein). |
(c) | Individual Limitations on Awards. |
(i) | The maximum number of shares of Common Stock that may be granted to any Participant during any calendar-year period with respect to Full Value Awards that are intended to be Performance-Based Compensation shall not exceed 500,000 shares in the aggregate (subject to adjustment as provided herein). |
(1) | If Awards are denominated in shares of Common Stock but an equivalent amount of cash is delivered in lieu of shares of Common Stock, the foregoing limit shall be applied based on the methodology used by the Committee to convert the number of shares into cash. |
(2) | If delivery of shares of Common Stock or cash is deferred until after shares of Common Stock have been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the shares are earned shall be disregarded. |
(ii) | In any fiscal year of Huron, no Participant who is a non-employee director of Huron may be granted Awards under the Plan valued at more than $1,000,000 at the time of grant. For the avoidance of |
(d) | Limits on Incentive Stock Options. The maximum number of shares of Common Stock to which Incentive Stock Options relate that may be granted under the Plan shall be 325,000 (subject to adjustment as provided herein). |
(e) | Individual Limitations on Cash Incentive Awards. The maximum amount payable to any Participant for any 12 month performance period with respect to a Cash Incentive Award granted under the Plan that is intended to be Performance-Based Compensation shall be $10,000,000 (prorated for performance periods that are greater or lesser than 12 months). For purposes of this Section 4(e): |
(i) | If the Award is denominated in cash but an equivalent amount of Common Stock is delivered in lieu of delivery of cash, the foregoing limit shall be applied to the cash based on the methodology used by the Committee to convert the cash into shares. |
(ii) | If delivery of shares of Common Stock or cash is deferred until after cash has been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the cash is earned shall be disregarded. |
(f) | Adjustments for Change in Capitalization. In the event that any dividend or other distribution is declared (whether in the form of cash, Common Stock, or other property), or there occurs any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange or other similar corporate transaction or event, the Committee shall equitably adjust, in its sole and absolute discretion, (i) the number and kind of shares of stock which may thereafter be issued in connection with Awards; (ii) the number and kind of shares of stock or other property issued or issuable in respect of outstanding Awards; (iii) the exercise price, grant price or purchase price relating to any Award; (iv) the limitations set forth in Sections 4(b), 4(c), 4(d), and 4(e) (provided that, with respect to Incentive Stock Options, such adjustment shall be made in accordance with Section 424 of the Code and any regulations thereunder and provided further that, to the extent applicable, such adjustment shall comply with Section 409A of the Code); and (v) any other adjustments that the Committee determines to be equitable (which may include, |
(g) | Reuse of Shares. Except to the extent that to do so would prevent the grant of Incentive Stock Options hereunder, the following shares of Common Stock shall again become available for Awards: (i) any shares subject to an Award that remain unissued upon the cancellation, surrender, exchange, forfeiture or termination of such Award without having been exercised or settled, (ii) any shares subject to an Award that are retained as payment of the exercise price or tax withholding obligations with respect to an Award, and (iii) a number of shares equal to the number of previously owned shares of Common Stock surrendered as payment of the exercise price of an Option or to satisfy tax withholding obligations with respect to an Award. In addition, (x) to the extent an Award is paid or settled in cash, the number of shares of Common Stock with respect to which such payment or settlement is made shall again be available for grants of Awards pursuant to the Plan and (y) in the event of the exercise of a Stock Appreciation Right granted in relation to an Option, the excess of the number of shares subject to the Stock Appreciation Right over the number of shares delivered upon the exercise of the Stock Appreciation Right shall again be available for grants of Awards pursuant to the Plan. |
5. | Administration of the Plan. |
(a) | General. The Plan shall be administered by the Committee. The Committee shall have the authority in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to (i) grant Awards; (ii) determine the Eligible Individuals to whom, and the time or times at which, Awards shall be granted; (iii) determine the type and number of Awards to be granted; the number of shares of Common Stock or cash or other property to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; (iv) determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged, |
(b) | Decisions Binding. Any interpretations of the Plan by the Committee and any decisions made by it under the Plan are final and binding on all persons. |
(c) | Delegation. Except to the extent prohibited by the applicable rules of any stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its administrative responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. |
(d) | Indemnification. No member of the Committee (or an authorized delegate of the Committee), and no officer of Huron or any of the Affiliates, shall be liable for any action taken or omitted to be taken by such individual or by any other member of the Committee or officer of Huron or any Affiliate in connection with the performance of duties under this Plan, except for such individual’s own willful misconduct or as expressly provided by law (the “Administrative Actions”). Further, the Committee (and all delegates of the Committee), in addition to such other rights of indemnification as they may have as members of the Board of Directors or officers of Huron or an Affiliate, any individual serving as a Committee member (and any authorized delegate) shall be indemnified and held harmless by Huron to the fullest extent allowed by law against all costs and expenses reasonably incurred by them in connection with any action, suit or proceeding to which they or any of them may be party by reason of any Administrative Action. |
6. | Participation. Subject to the terms and conditions of the Plan, the Committee shall determine and designate, from time to time, from among the Eligible |
7. | Options and Stock Appreciation Rights. |
(a) | Grant of Awards. The Committee may grant Options and/or Stock Appreciation Rights to Eligible Individuals, subject to the terms and conditions of the Plan. |
(b) | Identification of Options. Each Option shall be clearly identified as either an Incentive Stock Option or a Nonqualified Stock Option. |
(c) | Tandem Awards. An Option may but need not be in tandem with a Stock Appreciation Right, and a Stock Appreciation Right may but need not be in tandem with an Option (in either case, regardless of whether the original award was granted under this Plan or another plan or arrangement.) If an Option is in tandem with a Stock Appreciation Right, the exercise price of both the Option and Stock Appreciation Right shall be the same, and the exercise of the Option or Stock Appreciation Right with respect to a share of Common Stock shall cancel the corresponding tandem Stock Appreciation Right or Option right with respect to such share. If a Stock Appreciation Right is in tandem with an Option but is granted after the grant of the Option, or if an Option is in tandem with an Stock Appreciation Right but is granted after the grant of the Stock Appreciation Right, the later granted tandem Award shall have the same exercise price as the earlier granted Award, but in no event less than the Fair Market Value of a share of Common Stock at the time of such grant. |
(d) | Exercise Price. The “Exercise Price” of an Option or Stock Appreciation Right shall be established by the Committee at the time the Option or Stock Appreciation Right is granted; provided, however, that in no event shall the Exercise Price be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant (or, if greater, the par value of a share of Common Stock on the date of grant). |
(e) | No Repricing/Prohibition on Buy-Back. Except for either adjustments pursuant to Section 3(g) or reductions of the Exercise Price approved by Huron’s stockholders, the Exercise Price for any outstanding Option or Stock Appreciation Right may not be decreased after the date of grant nor may an outstanding Option or Stock Appreciation Right granted under the Plan be surrendered to Huron as consideration for the grant of a replacement Option or Stock Appreciation Right with a lower Exercise Price. Except as approved by Huron’s stockholders, in no event shall any Option or Stock Appreciation Right granted under the Plan be surrendered to Huron in consideration for a cash payment if, at the time of such surrender, the Exercise Price of the Option or Stock Appreciation Right is greater than the then current Fair Market Value of a share of Common Stock. In addition, no repricing of an Option shall be permitted without the approval of Huron’s stockholders if such approval is required under the rules of any stock exchange on which Common Stock is listed. |
(f) | Term and Exercise. |
(v) | Each Option or Stock Appreciation Right shall become exercisable at the time determined by the Committee at the date of grant, subject to the terms and conditions of the Plan. At the time of grant of an Option or Stock Appreciation Right, as applicable, the Committee may impose such restrictions or conditions of the exercisability of the Award as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of performance goals based on one or more Business Criteria or conditions relating to the completion of a specified period of service. Subject to Section 7(g) hereof, the Committee shall determine the expiration date of each Option and Stock Appreciation Right, as applicable, which shall be no later than the tenth anniversary of the date of grant of the Award. No Option or Stock Appreciation Right, as applicable, may be exercised after the expiration date applicable thereto. |
(vi) | An Option or Stock Appreciation Right shall be exercised by delivering the form of notice of exercise provided by Huron. |
(vii) | Payment for shares of Common Stock purchased upon the exercise of the Option shall be made on the effective date of such exercise by one or a combination of the following means (except that in the case of exercise using a broker assisted cashless exercise, payment may be made as soon as practicable after exercise): (1) in cash or cash equivalents; (2) by tendering, by actual delivery or attestation, shares of Common Stock owned by the Participant for at least six |
(viii) | Payment in settlement of a Stock Appreciation Right may be made solely in whole shares of Common Stock valued at their Fair Market Value on the date of exercise of the Stock Appreciation Right or alternatively, in the sole discretion of the Committee, solely in cash or a combination of cash and shares. If the Committee decides that payment will be made in shares of Common Stock, and the amount payable results in a fractional share, payment for the fractional share will be made in cash. |
(ix) | Upon the exercise of an Option or settlement of a Stock Appreciation Right in shares of Common Stock, in a manner determined by the Committee, either (1) certificates for shares of Common Stock shall be issued in the name of or for the account of the Participant or other person entitled to receive such shares or (2) shares of Common Stock shall be credited to such person’s account via book-entry transfer and shall be registered in such person’s name solely on the records of Huron’s transfer agent, in each case, as soon as practicable following the effective date on which the Option or Stock Appreciation Right, as applicable, is exercised. |
(g) | Provisions Relating to Incentive Stock Options. Incentive Stock Options may only be granted to employees of Huron and its Subsidiaries, in accordance with the provisions of Section 422 of the Code. To the extent that the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of Huron or any of its Subsidiaries shall exceed $100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of the preceding sentence, Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted. No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than ten percent of the total combined voting power of all classes of stock of Huron and its Subsidiaries unless (i) the exercise price of such Incentive Stock Option is at least 110% of the Fair Market Value of a share of Common Stock at the time such Incentive Stock Option is granted and |
(h) | Effect of Termination of Employment or Provision of Services on Options and Stock Appreciation Rights. The Committee shall determine the effect of termination of employment or termination of service on each Option and Stock Appreciation Right, subject to the terms and conditions of the Plan. Unless otherwise provided by the Committee: |
(i) | any Option or Stock Appreciation Right that is outstanding on the date on which a Participant’s employment or service with Huron and the Affiliates terminates due to death or as a result of the Participant’s being Disabled shall become fully vested and exercisable on the date on which the Participant’s employment or service terminates due to the Participant’s death or as a result of the Participant’s being Disabled; |
(ii) | any Option or Stock Appreciation Right that is outstanding on the date on which a Participant’s employment or service with Huron and the Affiliates terminates for Cause, whether or not then exercisable, shall be terminated effective as of the day immediately prior to the date of termination; and |
(iii) | any Option or Stock Appreciation Right that is outstanding on the date that a Participant’s employment or service with Huron and the Affiliates terminates for any reason other than Cause, death, or the Participant’s being Disabled, (1) shall remain exercisable for the 90 day period following such termination to the extent that it is exercisable at the time of such termination, but in no event following the expiration of its term and (2) shall be terminated effective as of the date of termination to the extent it remains unexercisable as of the date of termination; and |
(iv) | with respect to any Participant who is an employee of Huron or any Affiliate and who is in a position of corporate vice president, managing director or executive officer, any Option or Stock Appreciation Right that is outstanding on the date on which such Participant’s employment with Huron and the Affiliates terminates due to Retirement shall continue to vest and be exercisable in accordance with its terms as though the Participant had remained in the employ of Huron and its Affiliates, provided that the |
(i) | Leaves of Absence. Unless otherwise provided by the Committee and, with respect to Incentive Stock Options, to the extent permitted under Section 422 of the Code, subject in all cases to the terms and conditions of the Award, in the case of any Participant who takes an approved unpaid leave of absence (i) the Participant’s employment or service shall not be deemed to be terminated solely because of such leave of absence; (ii) the Participant shall continue to vest in his outstanding Options and Stock Appreciation Rights under the Plan during the first 30 days of such leave of absence; and (iii) the Participant shall cease to vest in his outstanding Options and Stock Appreciation Rights under the Plan during any period of such leave of absence which exceeds 30 days. |
(j) | Post-Exercise Limitations. Without otherwise limiting the Committee’s authority under the Plan, the Committee, in its discretion, may impose such restrictions on shares of Common Stock acquired pursuant to the exercise of an Option or received in settlement of a Stock Appreciation Right as it determines to be desirable, including, without limitation, restrictions relating to disposition of the shares and forfeiture restrictions based on service, performance, share ownership by the Participant, conformity with Huron’s recoupment or clawback policies and such other factors as the Committee determines to be appropriate. |
8. | Full Value Awards and Cash Incentive Awards. |
(a) | Grant of Awards. The Committee may grant Full Value Awards and/or Cash Incentive Awards to Eligible Individuals, subject to the terms and conditions of the Plan. |
(b) | Special Vesting Rules for Full Value Awards. Notwithstanding any other provision of the Plan or an Agreement to the contrary (other than Section 8(c)(i)), except for (i) Awards (when aggregated with all other Awards under the Plan) which do not exceed 5% of the total number of shares of Common Stock reserved for issuance under the Plan in the aggregate, (ii) grants made to newly eligible Participants to replace awards from a prior employer, and (iii) grants that are a form of payment of earned performance awards, (1) if an employee’s right to become vested in a Full Value Award is conditioned on the completion of a specified period of service with Huron or the Affiliates, without achievement of performance targets or other performance objectives (whether or not |
(c) | Effect of Termination of Employment or Provision of Services on Full Value Awards. The Committee shall determine the effect of termination of employment or termination of service on each Full Value Award, subject to the terms and conditions of the Plan. Unless otherwise provided by the Committee: |
(i) | any Full Value Award that is outstanding on the date on which a Participant’s employment or service with Huron and the Affiliates terminates due to death or as a result of the Participant’s being Disabled shall become fully vested (and exercisable, if applicable) on the date on which the Participant’s employment or service terminates due to the Participant’s death or as a result of the Participant’s being Disabled; |
(ii) | a Full Value Award that is outstanding on the date on which a Participant’s employment or service with Huron and the Affiliates terminates for Cause shall be terminated effective as of the day immediately prior to the date of termination and all shares subject to the Full Value Award (whether or not then vested or distributable) shall be terminated effective as of the day immediately prior to the date of termination; |
(iii) | any Full Value Award that is outstanding on the date that a Participant’s employment or service with Huron and the Affiliates terminates for any reason other than Cause, death, the Participant’s being Disabled or Retirement and that has not vested on the date of termination (and all rights with respect thereto, such as dividends or dividend equivalents) shall be terminated effective as of the date of termination; and |
(iv) | with respect to any Participant who is an employee of Huron or any Affiliate and who is in a position of corporate vice president, managing director or executive officer, any Full Value Award that is outstanding on the date on which such Participant’s employment with Huron and the Affiliates terminates due to Retirement shall continue to vest and be distributable in accordance with its terms as though the Participant had remained in the employ of Huron and the Affiliates provided that the Participant complies with the terms |
(d) | Leaves of Absence. Unless otherwise provided by the Committee, subject in all cases to the terms and conditions of the Award, in the case of any Participant who takes an approved unpaid leave of absence (i) the Participant’s employment or service shall not be deemed to be terminated solely because of such leave of absence; (ii) the Participant shall continue to vest in his outstanding Full Value Awards under the Plan during the first 30 days of such leave of absence; and (iii) the Participant shall cease to vest in his outstanding Full Value Awards under the Plan during any period of such leave of absence which exceeds 30 days. |
(e) | Restrictions. Without otherwise limiting the Committee’s authority under the Plan, the Committee, in its discretion, may impose such restrictions on shares of Common Stock acquired pursuant to the grant or settlement of a Full Value Award or the payment or retention of a Cash Incentive Award as it determines to be desirable, including, without limitation, restrictions relating to disposition of the shares and forfeiture restrictions based on service, performance, share ownership by the Participant, conformity with Huron’s recoupment or clawback policies and such other factors as the Committee determines to be appropriate. |
9. | Performance-Based Compensation. The Committee may designate any Full Value Award or a Cash Incentive Award granted to a Participant under the Plan as “Performance-Based Compensation” within the meaning of Section 162(m) of the Code and regulations thereunder. To the extent required by Section 162(m) of the Code, any such Award so designated shall be conditioned on the achievement of one or more performance targets as determined by the Committee and the following shall apply: |
(a) | Establishment of Performance Criteria. The performance targets established for the performance period established by the Committee shall be objective (as that term is described in regulations under Section 162(m) of the Code), and shall be established in writing by the Committee not later than 90 days after the beginning of the performance period (but in no event after 25% of the performance period has elapsed), and while the outcome as to the performance targets is substantially uncertain. The performance targets established by the Committee may be with respect to corporate performance, operating group or sub-group performance, individual performance, other group or |
(b) | Certification of Targets. A Participant otherwise entitled to receive a Performance-Based Compensation Award for any performance period shall not receive a settlement or payment of the Award until the Committee has determined that the applicable performance target(s) have been attained. To the extent that the Committee exercises discretion in making the determination required by this Section 9(b), such exercise of discretion may not result in an increase in the amount of the payment. |
(c) | Special Termination Rules. Subject to the other terms and conditions of the Plan, if an Award is intended to constitute Performance-Based Compensation, the Committee may provide that if a Participant’s employment with Huron and the Affiliates terminates because of death or the Participant’s being Disabled, or if a Change of Control occurs prior to the Participant’s termination date, the Participant’s Performance-Based Compensation may become vested without regard to whether the Award would continue to constitute Performance-Based Compensation. |
10. | Change of Control. Except as otherwise provided in an Agreement or an Alternative Agreement, in the event that (a) a Participant is employed on the date of a Change of Control and the Participant’s employment or service, as applicable, is terminated by Huron or the successor to Huron (or a Related Company which is his or her employer) for reasons other than Cause within 12 months following the Change of Control, or (b) the Plan is terminated by Huron or its successor following a Change of Control without provision for the continuation of outstanding Awards hereunder, all Options and Stock Appreciation Rights which are then outstanding shall become immediately exercisable and all other Awards shall become fully vested. If, (i) upon a Change of Control, awards in other shares or securities are substituted for outstanding Awards under the Plan and immediately following the Change of Control the Participant becomes employed (if the Participant was an employee immediately prior to the Change of Control) |
11. | Rights as a Stockholder. No person shall have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to any Award until the date of issuance of a stock certificate with respect to such shares or the date of crediting such shares to such person’s account via book-entry transfer. Except for adjustments pursuant to Section 3(g), no adjustment to any Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued or credit via book-entry transfer is made. |
12. | Limitations of Implied Rights. |
(a) | No Right to Employment or Continued Service. Nothing contained in the Plan or any Agreement shall confer upon any Participant any right with respect to the continuation of employment by or provision of services to Huron and the Affiliates or interfere in any way with the right of Huron and the Affiliates, subject to the terms of any separate agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of any Participant. |
(b) | No Claim to Award. No person shall have any claim or right to receive an Award hereunder. The grant of an Award to a Participant at any time shall neither require the Committee to grant any other Award to such Participant or other person at any time nor preclude the Committee from making subsequent grants to such Participant or any other person. |
(c) | No Right to Assets or Property. Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of Huron or any Affiliate whatsoever, including, without limitation, any specific funds, assets, or other property which Huron or any Affiliate, in its sole discretion, may set |
13. | Securities Matters. |
(a) | Compliance with Law. Notwithstanding anything herein to the contrary, Huron shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Common Stock pursuant to the Plan (or any crediting of shares to a person’s account via book-entry transfer) unless and until Huron is advised by its counsel (which may be Huron’s in-house counsel) that the issuance and delivery of such certificates (or crediting of such shares to an account) is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Committee may require, as a condition of the issuance and delivery of certificates (or crediting to an account) pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that, if applicable, such certificates bear such legends, as the Committee, in its sole discretion, deems necessary or advisable. |
(b) | Transfer of Shares. The transfer of any shares of Common Stock hereunder shall be effective only at such time as counsel to Huron (which may be Huron’s in-house counsel) shall have determined that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Committee may, in its sole discretion, defer the effectiveness of any transfer of shares of Common Stock hereunder in order to allow the issuance of such shares to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Committee shall inform the Participant in writing of its decision to defer the effectiveness of a transfer. During the period of such deferral in connection with the exercise of an Option, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto. |
14. | Withholding Taxes. All Awards and other payments under the Plan are subject to withholding of all applicable taxes. Whenever cash is to be paid pursuant to an Award, Huron and the Affiliates shall have the right to deduct therefrom an |
15. | Notification of Election Under Section 83(b) of the Code. If any Participant shall, in connection with the acquisition of shares of Common Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify Huron of such election within 10 days of filing notice of the election with the Internal Revenue Service. |
16. | Amendment or Termination of the Plan. The Board of Directors may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that approval of Huron’s stockholders shall be required for any such amendment if and to the extent such approval is required in order to comply with applicable law (including, but not limited to, the Incentive Stock Option regulations and any amendments thereto), or stock exchange or automated quotation system listing requirement; provided, further, that the approval of Huron’s stockholders shall be required for any amendment that would increase the per Participant limit on Awards that may be granted to non-employee directors of Huron or any Affiliate set forth in Section 4(c)(ii). Without limiting the generality of the foregoing, no amendment of the Plan will be made without the approval of Huron’s stockholders if such amendment would (a) materially increase the benefits accruing to a Participant under the Plan; (b) increase the aggregate number of shares of Common Stock that may be issued under the Plan; (c) modify the requirements as to eligibility for participation in the Plan; or (d) be required under Section 7(e) of the Plan (relating to prohibitions on repricing and buy-backs). |
17. | Transferability. |
(a) | General. Awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution. Upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executor or administrator of the Participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution. No transfer of an Award by will or the laws of descent and distribution shall be effective to bind Huron unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and (ii) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgments made by the Participant in connection with the grant of the Award. |
(b) | Family Members. Notwithstanding Section 17(a), during a Participant’s lifetime, the Committee may, in its sole discretion, pursuant to the provisions set forth in this Section 17(b), permit the transfer, assignment or other encumbrance of an outstanding Option, unless such Option is an Incentive Stock Option and the Committee and the Participant intend that it shall retain such status. Subject to the approval of the Committee and to any conditions that the Committee may prescribe, a Participant may, upon providing written notice to Huron, elect to transfer any or all Options granted to such Participant pursuant to the Plan to members of his or her immediate family, including, but not limited to, children, grandchildren and spouse or to trusts for the benefit of such immediate family members or to partnerships in which such family members are the only partners; provided, however, that no such transfer by any Participant may be made in exchange for consideration. Any such transferee must agree, in writing, to be bound by all terms and conditions of the Plan. |
(c) | Beneficiary. A Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary. |
18. | Miscellaneous. |
(a) | Notices. Any notice or document required to be filed with the Committee under the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid, to the Committee, in care of Huron at its principal executive offices. The Committee may, by advance written notice to affected persons, revise such notice procedure from time to time. Any notice required under the Plan (other than exercise notice) may be waived by the person entitled to notice. |
(b) | Form and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be in writing filed with the applicable Committee at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require. |
(c) | Agreement. The Committee may require a Participant to enter into an Agreement evidencing the Award, which Agreement shall contain such terms and conditions, not inconsistent with the Plan, as the Committee determines in its discretion. |
(d) | Liability for Cash Payments. Subject to the terms and conditions of the Plan, Huron and each Affiliate shall be liable for payment of cash due under the Plan with respect to any Participant to the extent that such benefits are attributable to the service rendered for Huron or the Affiliate, as applicable, by the Participant. Any disputes relating to liability of Huron or an Affiliate for cash payments shall be resolved by the Committee. |
(e) | Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties. |
(f) | Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular. |
(g) | Expenses and Receipts. The expenses of the Plan shall be paid by Huron. Any proceeds received by Huron in connection with any Award may be used for general corporate purposes. |
(h) | Applicable Law. Except to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance |
(i) | No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. |
19. | Severability. If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan. |
20. | Foreign Employees. Notwithstanding any other provision of the Plan to the contrary, the Committee may grant Awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan. In furtherance of such purposes, the Committee may make such modifications, amendments, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which Huron or an Affiliate operates or has employees. |
Name | Jurisdiction of Organization | |
Huron Consulting Group Holdings LLC | Delaware | |
Huron Consulting South East Asia PTE. LTD. | Singapore | |
Huron Middle East LLC | United Arab Emirates—Dubai | |
Huron Saudi Limited | Saudi Arabia | |
Huron Consulting Services LLC | Delaware | |
Huron Management Services LLC | Delaware | |
Huron Demand LLC | Delaware | |
Conseillers Huron Canada Limitée | Canada and Quebec | |
Huron Technologies Inc. | Delaware | |
Huron Transaction Advisory LLC | Delaware | |
Studer Holdings, Inc. | Delaware | |
The Studer Group, LLC | Florida | |
Rittman Mead Consulting Private Limited | India |
/s/ PricewaterhouseCoopers LLP |
Chicago, IL |
February 22, 2016 |
1. | I have reviewed this annual report on Form 10-K of Huron Consulting Group Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 22, 2016 | By: | /S/ JAMES H. ROTH | |||
James H. Roth | ||||||
President and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Huron Consulting Group Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 22, 2016 | By: | /S/ C. MARK HUSSEY | |||
C. Mark Hussey | ||||||
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: | February 22, 2016 | By: | /S/ JAMES H. ROTH | |||
James H. Roth | ||||||
President and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: | February 22, 2016 | By: | /S/ C. MARK HUSSEY | |||
C. Mark Hussey | ||||||
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer |
Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 16, 2016 |
Jun. 30, 2015 |
|
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Huron Consulting Group Inc. | ||
Trading Symbol | HURN | ||
Entity Central Index Key | 0001289848 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 21,554,771 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,579.3 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 24,775,823 | 24,976,395 |
Treasury stock, shares | 2,249,630 | 2,097,173 |
Description of Business |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Huron is a global professional services firm focused on assisting clients with their most complex business issues by delivering high-value, quality solutions to support their long-term strategic objectives. Huron specializes in serving clients in the healthcare, higher education, life sciences, and commercial sectors as these organizations face significant transformational change and regulatory or economic pressures in dynamic market environments. With its deep industry and technical expertise, Huron provides advisory, consulting, technology, and analytic solutions to deliver sustainable and measurable results. We provide consulting services to a wide variety of both financially sound and distressed organizations, including healthcare organizations, leading academic institutions, Fortune 500 companies, and governmental entities. |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements reflect the financial position at December 31, 2015 and 2014, and the results of operations and cash flows for the years ended December 31, 2015, 2014, and 2013. Certain amounts reported in previous years have been reclassified to conform to the 2015 presentation. The consolidated financial statements include the accounts of Huron Consulting Group Inc. and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. During 2015, we began evaluating strategic alternatives related to our Huron Legal segment, including the potential divestiture of the practice. On December 10, 2015, we entered into an agreement to sell our Huron Legal segment to Consilio, Inc. ("Consilio"). Pursuant to the agreement, Consilio acquired substantially all of the assets and assumed certain liabilities of Huron Legal, and acquired all issued and outstanding equity interests in certain entities wholly owned by the Company. As a result of the divestiture, the operating results of Huron Legal are reported as “discontinued operations.” All other operations of the business are considered “continuing operations.” Amounts previously reported have been reclassified to conform to this presentation in accordance with Financial Accounting Standards Board (“FASB”) ASC 205, Presentation of Financial Statements to allow for meaningful comparison of continuing operations. Unless indicated otherwise, the information presented in the notes to the consolidated financial statements relates to our continuing operations and does not include results of Huron Legal. See Note 3 “Discontinued Operations” for additional information on our discontinued operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Actual results may differ from these estimates and assumptions. Revenue Recognition We recognize revenues in accordance with ASC 605, Revenue Recognition. Under ASC 605, revenue is recognized when persuasive evidence of an arrangement exists, the related services are provided, the price is fixed or determinable, and collectability is reasonably assured. We generate the majority of our revenues from providing professional services under four types of billing arrangements: fixed-fee (including software license revenue), time-and-expense, performance-based, and software support and maintenance and subscriptions. In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. It is the client's expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances. We generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Contracts within our Studer Group solution are fixed-fee partner contracts with multiple deliverables, which primarily consist of coaching services, as well as seminars, materials and software products (“Partner Contracts”). Revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract. All other revenues under Partner Contracts are recognized at the time the service is provided. Estimates of total engagement revenues and cost of services are monitored regularly during the term of the engagement. If our estimates indicate a potential loss, such loss is recognized in the period in which the loss first becomes probable and reasonably estimable. We also generate revenues from software licenses for our revenue cycle management software and research administration and compliance software. Licenses for our revenue cycle management software are sold only as a component of our consulting projects, and the services we provide are essential to the functionality of the software. Therefore, revenues from these software licenses are recognized over the term of the related consulting services contract in accordance with ASC 605. License revenue from our research administration and compliance software is recognized in accordance with ASC 985-605, generally in the month in which the software is delivered. Time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and publication orders purchased by our clients outside of Partner Contracts within our Studer Group solution. We recognize revenues under time-and-expense arrangements as the related services or publications are delivered. In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We do not recognize revenues under performance-based billing arrangements until all related performance criteria are met. Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance. We also generate subscription revenue from our cloud-based analytic tools and solutions. The software support and maintenance and subscription-based revenues are recognized ratably over the support or subscription period, which ranges from one to three years. These fees are billed in advance and included in deferred revenues until recognized. We have arrangements with clients in which we provide multiple elements of services under one engagement contract. Revenues under these types of arrangements are allocated to each element based on the element’s fair value in accordance with ASC 605 and recognized pursuant to the criteria described above. Provisions are recorded for the estimated realization adjustments on all engagements, including engagements for which fees are subject to review by the bankruptcy courts. Expense reimbursements that are billable to clients are included in total revenues and reimbursable expenses, and typically an equivalent amount of reimbursable expenses are included in total direct costs and reimbursable expenses. Reimbursable expenses are primarily recognized as revenue in the period in which the expense is incurred. Subcontractors that are billed to clients at cost are also included in reimbursable expenses. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the accompanying consolidated balance sheets. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled services. Client prepayments and retainers are classified as deferred revenues and recognized over future periods as earned in accordance with the applicable engagement agreement. Allowances for Doubtful Accounts and Unbilled Services We maintain allowances for doubtful accounts and for services performed but not yet billed based on several factors, including the estimated cash realization from amounts due from clients, an assessment of a client’s ability to make required payments, and the historical percentages of fee adjustments and write-offs by age of receivables and unbilled services. The allowances are assessed by management on a regular basis. We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client’s inability to make required payments on accounts receivables, we record the provision to selling, general and administrative expenses. Direct Costs and Reimbursable Expenses Direct costs and reimbursable expenses consist primarily of revenue-generating employee compensation and their related benefit and share-based compensation costs, the cost of outside consultants or subcontractors assigned to revenue-generating activities, other third-party costs directly attributable to our revenue-generating activities, and direct expenses to be reimbursed by clients. Direct costs and reimbursable expenses incurred on engagements are expensed in the period incurred. Cash and Cash Equivalents We consider all highly liquid investments, including overnight investments and commercial paper, with original maturities of three months or less to be cash equivalents. Concentrations of Credit Risk To the extent receivables from clients become delinquent, collection activities commence. No single client balance is considered large enough to pose a material credit risk. The allowances for doubtful accounts and unbilled services are based upon the expected ability to collect accounts receivable, and bill and collect unbilled services. Management does not anticipate incurring losses on accounts receivable in excess of established allowances. See Note 18 “Segment Information” for concentration of accounts receivable and unbilled services. We hold our cash in accounts at multiple third-party financial institutions. These deposits, at times, may exceed federally insured limits. We review the credit ratings of these financial institutions, regularly monitor the cash balances in these accounts, and adjust the balances as appropriate. However, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. Investments Our long-term investment consists of our convertible debt investment in Shorelight Holdings, LLC. We classified the investment as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. The investment is carried at fair value with unrealized holding gains and losses reported in other comprehensive income (loss). When the investment is in an unrealized loss position, we assess whether the investment is other than temporarily impaired. We consider impairments to be other than temporary if they are related to significant credit deterioration or if it is likely we will sell the security before the recovery of its cost basis. We have not identified any other than temporary impairments for our convertible debt investment. In the event there are realized gains and losses or declines in value judged to be other than temporary, we will record the amount in earnings. See Note 12 “Fair Value of Financial Instruments” for further information on our convertible debt investment. Fair Value of Financial Instruments See Note 12 “Fair Value of Financial Instruments” for the accounting policies used to measure the fair value of our financial assets and liabilities that are measured at fair value on a recurring basis. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Software, computers, and related equipment are depreciated over an estimated useful life of two to four years. Furniture and fixtures are depreciated over five years. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the initial term of the lease. Software Development Costs We expense development costs for software products that will be sold, leased, or otherwise marketed until technological feasibility has been established. Similarly, we expense all development costs after the software is available for general release to customers. During the period between the establishment of technological feasibility and availability for general release to customers, software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized development costs are amortized in proportion to current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product. We classify capitalized development costs for software products to be sold, leased, or otherwise marketed as other non-current assets on our consolidated balance sheet. Unamortized capitalized software development costs were $1.4 million at both December 31, 2015 and 2014. During the years ended December 31, 2015, 2014, and 2013, we amortized $1.0 million, $0.8 million, and $0.2 million, respectively, of capitalized software development costs. Impairment of Long-Lived Assets Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a significant decline in forecasted operating results over an extended period of time. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. No impairment charges for long-lived assets were recorded in 2015, 2014, or 2013. Intangible Assets Other Than Goodwill We account for intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. This Topic requires that certain identifiable intangible assets be amortized over their expected useful lives using a method that reflects the economic benefit expected to be derived from the assets or on a straight-line basis. Intangible assets are reviewed for impairment in a similar manner to our long-lived assets described above. No impairment charges for intangible assets were recorded in 2015, 2014, or 2013. Goodwill For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. We have five reporting units, which consist of our Huron Healthcare, Huron Education and Life Sciences, and All Other operating segments, and our Financial Advisory practice and Enterprise Performance Management and Analytics (“EPM&A”) practice, which together make up our Huron Business Advisory operating segment. We test goodwill for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. We perform our annual goodwill impairment test as of November 30 and monitor for interim triggering events on an ongoing basis. Pursuant to our policy, we performed the annual goodwill impairment test as of November 30, 2015 and determined that no impairment of goodwill existed as of that date. Further, we evaluated whether any events have occurred or any circumstances have changed since November 30, 2015 that would indicate goodwill may have become impaired since our annual impairment test. Based on our evaluation as of December 31, 2015, we determined that no indications of impairment have arisen since our annual goodwill impairment test. See Note 5 “Goodwill and Intangible Assets” for information regarding our recent goodwill impairment tests. Business Combinations We use the acquisition method of accounting in accordance with ASC 805, Business Combinations. Each acquired company’s operating results are included in our consolidated financial statements starting on the date of acquisition. The purchase price is equivalent to the fair value of consideration transferred. Tangible and identifiable intangible assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed. Contingent consideration, which is primarily based on the business achieving certain performance targets, is recognized at its fair value on the acquisition date, and changes in fair value are recognized in earnings until settled. Refer to Note 12 “Fair Value of Financial Instruments” for further information regarding our contingent acquisition liability balances. Deferred Lease Incentives We record as non-current the portion of the deferred lease incentive liability that we expect to recognize over a period greater than one year. The non-current portion of the deferred lease incentive liability totaled $10.0 million and $12.7 million at December 31, 2015 and 2014, respectively, and was primarily generated from tenant improvement allowances and rent abatement. Deferred lease incentives are amortized on a straight-line basis over the life of the lease. The portion of the deferred lease incentive corresponding to the rent payments that will be paid within 12 months of the balance sheet date is classified as current liabilities. We monitor the classification of such liabilities based on the expectation of their utilization periods. Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes. Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets will not likely be recovered from future taxable income, a valuation allowance is established against such deferred tax assets. Share-Based Compensation We account for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based compensation cost is measured based on the grant date fair value of the respective awards. We generally recognize share-based compensation ratably using the straight-line attribution method; however, for those awards with performance criteria and graded vesting features, we use the graded vesting attribution method. We net share-based compensation expense with our estimated amount of expected forfeitures. Sponsorship and Advertising Costs Sponsorship and advertising costs are expensed as incurred. Such expenses for 2015, 2014, and 2013 totaled $6.4 million, $6.0 million, and $4.6 million, respectively, and are a component of selling, general and administrative expenses on our consolidated statement of earnings. Convertible Senior Notes In September 2014, we issued $250 million principal amount of 1.25% convertible senior notes due 2019 (the “Convertible Notes”) in a private offering. In accordance with ASC 470, Debt, we have separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying value of the equity component representing the conversion option, which is recognized as a debt discount, was determined by deducting the fair value of the liability component from the proceeds of the Convertible Notes. The debt discount is amortized to interest expense using the effective interest method over the term of the Convertible Notes. The equity component will not be remeasured as long as it continues to meet the conditions for equity classification. Refer to Note 7 “Financing Arrangements” for further information regarding the Convertible Notes. Debt Issuance Costs We amortize the costs we incur to obtain debt financing over the contractual life of the related debt using the effective interest method for non-revolving debt and the straight-line method for revolving debt. The amortization expense is included in interest expense, net of interest income in our statement of earnings. Unamortized debt issuance costs attributable to our revolving credit facility are included as a component of prepaid expenses and other current assets and other non-current assets. Foreign Currency Assets and liabilities of foreign subsidiaries whose functional currency is not the United States Dollar (USD) are translated into the USD using the exchange rates in effect at period end. Revenue and expense items are translated using the average exchange rates for the period. Foreign currency translation adjustments are included in accumulated other comprehensive loss, which is a component of stockholders’ equity. Foreign currency transaction gains and losses are included in other income, net on the statement of earnings. We recognized $1.6 million of foreign currency transaction losses in 2015 and immaterial foreign currency transaction losses in 2014 and 2013. Segment Reporting ASC 280, Segment Reporting, establishes annual and interim reporting standards for an enterprise’s business segments and related disclosures about its products, services, geographic areas, and major customers. Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker manages the business under four operating segments, which are reportable segments: Huron Healthcare, Huron Education and Life Sciences, Huron Business Advisory, and All Other. During the fourth quarter of 2015, we divested the Huron Legal segment. Refer to Note 3 “Discontinued Operations” for additional information on the divestiture. New Accounting Pronouncements In January 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments to the guidance enhance the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The updated guidance is effective for us beginning January 1, 2018. We are currently evaluating the potential effect this guidance will have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred taxes in the statement of financial position. The amendments to the guidance require that deferred tax assets and liabilities be classified as noncurrent in a classified balance sheet. The updated guidance is effective for us beginning January 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. This guidance may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. We have elected to early adopt the amendments to this guidance beginning with this Annual Report on Form 10-K for the year ended December 31, 2015 and apply the amendments prospectively. As a result, we reclassed $14.5 million of net current deferred tax assets to non-current deferred income taxes, net on the consolidated balance sheet as of December 31, 2015. Prior periods were not retrospectively adjusted. In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in ASU 2015-05 provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for us beginning in the first quarter of 2016 with early adoption permitted. The guidance may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The amendments to the guidance require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements: Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarifies the treatment of debt issuance costs from line-of-credit arrangements after the adoption of ASU 2015-03. ASU 2015-15 clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This guidance is effective for us beginning in the first quarter of 2016 and will be applied on a retrospective basis. Upon adoption of these amendments, we expect to reclassify debt issuance costs of $1.2 million included in prepaid expenses and other current assets and $3.4 million included in other non-current assets to long-term debt, net of current portion on our consolidated balance sheet as of December 31, 2015. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810, Consolidation. ASU 2015-02 makes targeted amendments to the current consolidation guidance, which could change consolidation conclusions. This guidance will be effective for us beginning in the first quarter of 2016 and early adoption is permitted. We do not expect the adoption of this guidance to have any impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as a new Topic, ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09, as amended, is effective for us beginning in the first quarter of 2018 and is to be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption will be permitted as of the original effective date in ASU 2014-09 (i.e., annual reporting periods beginning after December 15, 2016). We are currently evaluating the potential effect of adopting this guidance on our consolidated financial statements, as well as the transition methods. |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations During 2015, we began evaluating strategic alternatives related to our Huron Legal segment, including the potential divestiture of the practice. On December 10, 2015, we entered into an agreement to sell Huron Legal to Consilio, Inc. ("Consilio"). Pursuant to the agreement, Consilio acquired substantially all of the assets and assumed certain liabilities of Huron Legal, and acquired all issued and outstanding equity interests in certain entities wholly owned by the Company. Huron Legal provides eDiscovery services, consulting services and contract management services related to law department management, information governance and compliance, legal discovery, litigation management, and legal analytics to legal departments, law firms and companies in connection with their eDiscovery, law department operations and contract and litigation management needs. The sale closed on December 31, 2015, at which time we received proceeds of $110.1 million, which consisted of the following:
The divestiture of the Huron Legal segment represents a strategic shift that has a major effect on our operations and financial results as contemplated under ASC 205-20, Presentation of Financial Statements - Discontinued Operations. As such, the operations of our Huron Legal segment have been reclassified as discontinued operations in our consolidated statements of earnings for the years ended December 31, 2015, 2014 and 2013 and in our consolidated balance sheets as of December 31, 2015 and 2014. We recognized a pretax disposal loss of $2.3 million, which is reported in discontinued operations for the year ended December 31, 2015. As of December 31, 2015, no assets or liabilities of the disposed business remained on our consolidated balance sheet. The following table summarizes Huron Legal's assets and liabilities classified as discontinued operations as of December 31, 2014.
The table below summarizes the operating results of Huron Legal for the years ended December 31, 2015, 2014, and 2013.
(1) During 2015, the Huron Legal segment incurred a $13.3 million restructuring charge. Of the $13.3 million, $6.1 million related to accelerated depreciation on assets disposed of as a result of the sale, $5.1 million related to employee costs incurred in connection with the sale, $1.1 million related to the accrual of our remaining lease obligations for vacated spaces, net of estimated sublease income, and $1.0 million related to severance costs incurred from prior workforce reductions. (2) See Note 16 "Income Taxes" for additional detail on the income tax expense recognized for discontinued operations. The table below summarizes the amounts reflected in our consolidated statements of cash flows that relate to the discontinued operations for the years ended December 31, 2015, 2014, and 2013.
In connection with the sale of Huron Legal, we entered into a transition services agreement ("TSA") with Consilio, whereby Huron will provide certain post-closing services and support to Consilio to facilitate an orderly transfer of the Huron Legal business operations. Billings under the TSA will be recorded as a reduction of the costs to provide the respective service, primarily in selling, general and administrative expenses in the consolidated statements of earnings. Services under the TSA began on January 1, 2016 and are expected to continue for six to twelve months. Other than the TSA, we have no continuing involvement with the Huron Legal segment. |
Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Studer Holdings, Inc. On February 12, 2015, we acquired 100% of the outstanding stock of Studer Holdings, Inc. (“Studer Group”) from the existing shareholders in accordance with an Agreement and Plan of Merger dated January 26, 2015 (the “Merger Agreement”). Studer Group is a professional services firm that assists healthcare providers achieve cultural transformation to deliver and sustain improvement in clinical outcomes and financial results. The acquisition combines Huron Healthcare’s performance improvement and clinical transformation capabilities with Studer Group’s Evidence-Based LeadershipSM framework to provide leadership and cultural transformation expertise for healthcare provider clients. The acquisition date fair value of the consideration transferred for Studer Group was approximately $325.2 million, which consisted of the following:
We funded the cash component of the purchase price with cash on hand and borrowings of $102.0 million under our senior secured credit facility. We issued 28,486 shares of our common stock as part of the consideration transferred, with an acquisition date fair value of $2.2 million based on the closing price of $77.35 on the date of acquisition. The acquisition was accounted for using the acquisition method of accounting. Tangible and identifiable intangible assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the acquisition date.
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the acquisition date.
The weighted-average amortization period for the identifiable intangible assets shown above is 6.3 years. Customer relationships and customer contracts represent the fair values of the underlying relationships and agreements with Studer Group customers. The trade name represents the fair value of the brand and name recognition associated with the marketing of Studer Group’s service offerings. Technology and software and publishing content represent the estimated fair values of Studer Group’s software and books that are sold to customers. Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed, and largely reflects the expanded market opportunities expected from combining the service offerings of Huron and Studer Group, as well as the assembled workforce of Studer Group. Goodwill recognized in conjunction with the acquisition of Studer Group was recorded in the Huron Healthcare segment. Goodwill of $119.5 million is expected to be deductible for income tax purposes. Studer Group’s results of operations have been included in our consolidated statements of earnings and other comprehensive income and results of operations of our Huron Healthcare segment from the date of acquisition. For the twelve months ended December 31, 2015, revenues from Studer Group were $79.9 million and operating income was $5.1 million, which included $21.3 million of amortization expense for intangible assets acquired. In connection with the acquisition of Studer Group, we incurred $2.1 million of transaction and acquisition-related expenses, $0.9 million of which were incurred in 2014, and $1.2 million of which were incurred in 2015. These costs are recorded in selling, general and administrative expenses in the period in which they were incurred. The following supplemental pro forma information summarizes the combined results of operations for Huron and Studer Group as though the companies were combined on January 1, 2014.
The historical financial information has been adjusted to give effect to pro forma adjustments, which consist of intangible assets amortization expense, transaction and acquisition-related costs, interest expense, the related income tax effects, and shares issued as consideration. These adjustments are based upon currently available information and certain assumptions. Therefore, the pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations actually would have been had it completed the acquisition on January 1, 2014. The historical results included in the pro forma consolidated results do not purport to project future results of operations of the combined companies nor do they reflect the expected realization of any cost savings or revenue synergies associated with the acquisition. Sky Analytics, Inc. Effective January 1, 2015, we completed the acquisition of Sky Analytics, Inc. ("Sky Analytics"), a Massachusetts-based provider of legal spend management software for corporate law departments. The acquisition date fair value of the consideration transferred totaled $9.7 million, which included cash of $8.8 million and the fair value of contingent consideration of $0.9 million. Sky Analytics' results of operations have been included in the results of operations of our Huron Legal segment from the date of acquisition, and classified as discontinued operations upon the sale of the Huron Legal segment in the fourth quarter of 2015. Refer to Note 3 "Discontinued Operations" for additional detail on the sale of the Huron Legal segment. Rittman Mead India Effective July 1, 2015, we completed the acquisition of Rittman Mead Consulting Private Limited ("Rittman Mead India"), the India affiliate of Rittman Mead Consulting Ltd. Rittman Mead India is a data and analytics consulting firm that specializes in the implementation of enterprise performance management and analytics systems. The acquisition date fair value of the consideration transferred totaled $1.2 million. Rittman Mead India's results of operations have been included in our consolidated financial statements and results of operations of our Huron Business Advisory segment from the date of acquisition. Cloud62, Inc. Effective October 1, 2015, we completed the acquisition of Cloud62, Inc. ("Cloud62"), a New York-based consulting firm specializing in Salesforce.com implementations and related cloud-based applications. The acquisition date fair value of the consideration transferred totaled $9.2 million, which included cash of $7.1 million and the fair value of contingent consideration of $2.1 million. As part of the purchase price allocation, we recorded $4.2 million of intangible assets and $4.4 million of goodwill. Cloud62's results of operations have been included in our consolidated financial statements and results of operations of our Huron Business Advisory segment from the date of acquisition. The Frankel Group Associates LLC During the first quarter of 2014, we completed the acquisition of The Frankel Group Associates LLC, a New York-based life sciences consulting firm, within the Huron Education and Life Sciences segment. The acquisition date fair value of the consideration transferred totaled $18.0 million, which included the fair value of contingent consideration of $0.6 million. As part of the purchase price allocation, we recorded $5.7 million of intangible assets and $8.3 million of goodwill. Vonlay, LLC During the second quarter of 2014, we completed the acquisition of Vonlay, LLC, a healthcare technology consulting firm, within the Huron Healthcare segment. The fair value of the consideration transferred totaled $34.5 million. As part of the purchase price allocation, we recorded $8.3 million of intangible assets and $21.7 million of goodwill. Threshold Consulting, Inc. During the fourth quarter of 2014, we completed the acquisition of Threshold Consulting, Inc., a provider of cloud-based software as a service applications, data warehousing and business intelligence solutions, as well as customer relationship management consulting services, within the Huron Business Advisory segment. The fair value of the consideration transferred totaled $2.1 million, which included the fair value of contingent consideration of $0.2 million. As part of the purchase price allocation, we recorded $0.6 million of intangible assets and $1.5 million of goodwill. Blue Stone International, LLC During 2013, we completed the acquisition of Blue Stone International, LLC, a Chicago-based provider of professional services supporting Oracle enterprise performance management, information management and business intelligence solutions. The aggregate fair value of the consideration transferred totaled $30.0 million. We recorded $8.8 million of intangible assets and $17.1 million of goodwill related to this acquisition. Blue Stone's results of operations have been included in our consolidated financial statements and results of operations of our Huron Business Advisory segment from the date of acquisition. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2015 and 2014.
First Quarter 2015 Goodwill Impairment Test During the first three months of 2015, the operating results for Huron Legal were generally in line with management’s expectations for the quarter but still significantly below the results achieved during the first three quarters of 2014. Given the increase in the reporting unit’s carrying value as a result of the Sky Analytics acquisition and weakened results compared to the first nine months of 2014, we performed an interim impairment test for the goodwill balances within our Huron Legal reporting unit as of March 31, 2015. Our goodwill impairment test was performed using the quantitative two-step process. Based on the results of the first step of the goodwill impairment test, we determined that the fair value of our Huron Legal reporting unit exceeded its carrying value, and, therefore, the second step of the goodwill impairment test was not necessary. 2015 Annual Goodwill Impairment Test Pursuant to our policy, we performed our annual goodwill impairment test as of November 30, 2015 on our five reporting units with goodwill balances: Huron Healthcare, Huron Education and Life Sciences, Financial Advisory, EPM&A, and Huron Legal, which was subsequently sold in December 2015. Our All Other reporting unit does not have a goodwill balance. For each reporting unit, we reviewed goodwill for impairment utilizing the quantitative two-step process. We performed the first step of the quantitative two-step impairment test by comparing the fair value of each reporting unit to its respective carrying amount, including goodwill. Based on the results of the first step of the goodwill impairment test, we determined that the fair values of all reporting units exceeded their carrying value. Therefore, the second step of the goodwill impairment test was not necessary. Intangible Assets Intangible assets as of December 31, 2015 and 2014 consisted of the following:
In connection with the sale of the Huron Legal segment in 2015, we wrote off $3.3 million of intangible assets, which represents the Huron Legal segment intangible asset carrying balance as of the closing date. Refer to Note 3 "Discontinued Operations" for additional information on the sale. Identifiable intangible assets with finite lives are amortized over their estimated useful lives. The majority of the customer relationships, as well as the customer contracts and the trade name acquired in the acquisition of Studer Group, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from these assets. All other intangible assets are amortized on a straight-line basis. Intangible assets amortization expense for the years ended December 31, 2015, 2014, and 2013 was $28.7 million, $8.9 million, and $3.9 million, respectively. The table below sets forth the estimated annual amortization expense for the next five years for the intangible assets recorded as of December 31, 2015.
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors. |
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Property and Equipment, Net | Property and Equipment, Net Depreciation expense for property and equipment was $12.3 million, $10.3 million, and $9.2 million for 2015, 2014, and 2013, respectively. Property and equipment at December 31, 2015 and 2014 are detailed below:
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Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Arrangements | Financing Arrangements A summary of the carrying amounts of our debt follows:
A summary of the scheduled maturities of our debt follows:
Convertible Notes In September 2014, the Company issued $250 million principal amount of 1.25% convertible senior notes due 2019 (the “Convertible Notes”) in a private offering. The Convertible Notes are governed by the terms of an indenture between the Company and U.S. Bank National Association, as Trustee (the “Indenture”). The Convertible Notes are senior unsecured obligations of the Company and will pay interest semi-annually on April 1 and October 1 of each year at an annual rate of 1.25%. The Convertible Notes will mature on October 1, 2019, unless earlier repurchased by the Company or converted in accordance with their terms. Upon conversion, the Convertible Notes will be settled, at our election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. Our current intent and policy is to settle conversions with a combination of cash and shares of common stock with the principal amount of the Convertible Notes paid in cash, in accordance with the settlement provisions of the Indenture. The initial conversion rate for the Convertible Notes is 12.5170 shares of our common stock per $1,000 principal amount of the Convertible Notes, which is equal to an initial conversion price of approximately $79.89 per share of our common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest, except in certain limited circumstances described in the Indenture. Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture) the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change. Additionally, if the Company undergoes a “fundamental change” (as defined in the Indenture), a holder will have the option to require the Company to repurchase all or a portion of its Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus any accrued and unpaid interest. As discussed below, the warrants, which were entered into in connection with the Convertible Notes, effectively raise the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share. Holders of the Convertible Notes may convert their Convertible Notes at their option at any time prior to July 1, 2019, only under the following circumstances:
On or after July 1, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or a portion of its Convertible Notes, regardless of the foregoing circumstances. In accordance with ASC 470, Debt, we have separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does not have an associated convertible feature, assuming our non-convertible debt borrowing rate. The carrying value of the equity component representing the conversion option, which is recognized as a debt discount, was determined by deducting the fair value of the liability component from the proceeds of the Convertible Notes. The debt discount is amortized to interest expense using an effective interest rate of 4.751% over the term of the Convertible Notes. As of December 31, 2015, the remaining life of the Convertible Notes is 3.8 years. The equity component will not be remeasured as long as it continues to meet the conditions for equity classification. As of December 31, 2015 and 2014, the Convertible Notes consisted of the following:
(1)Included in Additional paid-in capital on the consolidated balance sheet. The transaction costs related to the issuance of the Convertible Notes were separated into liability and equity components based on their relative values, as determined above. Transaction costs attributable to the liability component are capitalized and amortized to interest expense over the term of the Convertible Notes, and transaction costs attributable to the equity component were netted with the equity component of the Convertible Notes in stockholders’ equity. Total debt issuance costs were $7.3 million, of which $6.2 million was allocated to liability issuance costs and $1.1 million was allocated to equity issuance costs. The following table presents the amount of interest expense recognized related to the Convertible Notes:
In connection with the issuance of the Convertible Notes, we entered into convertible note hedge transactions and warrant transactions. The convertible note hedge transactions are intended to reduce the potential future economic dilution associated with the conversion of the Convertible Notes and, combined with the warrants, effectively raise the price at which economic dilution would occur from the initial conversion price of approximately $79.89 to approximately $97.12 per share. For purposes of the computation of diluted earnings per share in accordance with U.S. GAAP, dilution will occur when the average share price of our common stock for a given period exceeds the conversion price of the Convertible Notes, which initially is equal to approximately $79.89 per share. The convertible note hedge transactions and warrant transactions are discussed separately below.
The Company recorded an initial deferred tax liability of $15.4 million in connection with the debt discount associated with the Convertible Notes and recorded an initial deferred tax asset of $16.5 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are included in non-current deferred tax liabilities on the consolidated balance sheets. Senior Secured Credit Facility On March 31, 2015, the Company and certain of the Company’s subsidiaries entered into a Second Amended and Restated Credit Agreement dated as of March 31, 2015 (the “Amended Credit Agreement”) by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders identified therein, and Bank of America, N.A., as administrative agent and collateral agent, consisting of a $500 million five-year senior secured revolving credit facility. The Amended Credit Agreement becomes due and payable in full upon maturity on March 31, 2020. The Amended Credit Agreement amended and restated, in its entirety, the credit agreement entered into as of April 14, 2011 (as amended and modified, the “Existing Credit Agreement”). The Amended Credit Agreement provides for, among other things, an extension of the maturity date and a reduction in pricing, and replaced the existing revolving credit and term loan facility with an increased revolving credit facility. The Amended Credit Agreement provides for the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount of up to $100 million, subject to customary conditions and the approval of any lender whose commitment would be increased, resulting in a maximum available principal amount under the Amended Credit Agreement of $600 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under the Existing Credit Agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, share repurchases, and general corporate purposes. Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, two, three or six-month LIBOR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.25% per annum and 1.75% per annum, in the case of LIBOR borrowings, or between 0.25% per annum and 0.75% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time. Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances, including a requirement to pay all amounts outstanding under the Amended Credit Agreement 90 days prior to the Convertible Indebtedness Maturity Date (as defined in the Amended Credit Agreement) unless (1) the Convertible Indebtedness Maturity Date is waived or extended to a later date, (2) the Company can demonstrate (a) Liquidity (as defined in the Amended Credit Agreement) in an amount at least equal to the principal amount due on the Convertible Indebtedness Maturity Date, and (b) financial covenant compliance after giving effect to such payments and any additional indebtedness incurred on a pro forma basis, or (3) this requirement is waived by the Required Lenders (as defined in the Amended Credit Agreement). 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 “Amended 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 Amended 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 either 3.25 to 1.00 or 3.50 to 1.00, depending on the measurement period, 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 share-based compensation costs, certain non-cash restructuring charges, and pro forma historical EBITDA for businesses acquired. At December 31, 2015, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 2.09 to 1.00 and a Consolidated Interest Coverage Ratio of 15.70 to 1.00. Borrowings outstanding under the Amended Credit Agreement at December 31, 2015 totaled $92.0 million. These borrowings carried a weighted average interest rate of 2.4%, including the effect of the interest rate swaps described below in Note 11 “Derivative Instruments and Hedging Activity." Borrowings outstanding under the Existing Credit Agreement at December 31, 2014 were $143.8 million and carried a weighted average interest rate of 2.3%. The borrowing capacity under the revolving credit facility is reduced by any outstanding borrowings under the revolving credit facility and outstanding letters of credit. At December 31, 2015, we had outstanding letters of credit totaling $4.8 million, which are primarily used as security deposits for our office facilities. As of December 31, 2015, the unused borrowing capacity under the revolving credit facility was $403.2 million. |
Capital Structure |
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Equity [Abstract] | |
Capital Structure | Capital Structure Preferred Stock We are authorized to issue up to 50,000,000 shares of preferred stock. Our certificate of incorporation authorizes our board of directors, without any further stockholder action or approval, to issue these shares in one or more classes or series, to establish from time to time the number of shares to be included in each class or series, and to fix the rights, preferences and privileges of the shares of each wholly unissued class or series and any of its qualifications, limitations or restrictions. As of December 31, 2015 and 2014, no such preferred stock has been approved or issued. Common Stock We are authorized to issue up to 500,000,000 shares of common stock, par value $.01 per share. The holders of common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders. Subject to the rights and preferences of the holders of any series of preferred stock that may at the time be outstanding, holders of common stock are entitled to such dividends as our board of directors may declare. In the event of any liquidation, dissolution or winding-up of our affairs, after payment of all of our debts and liabilities and subject to the rights and preferences of the holders of any series of preferred stock that may at the time be outstanding, holders of common stock will be entitled to receive the distribution of any of our remaining assets. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 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, outstanding common stock options, convertible senior notes, and outstanding warrants, to the extent dilutive. Earnings per share under the basic and diluted computations are as follows:
The anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were as follows:
See Note 7 “Financing Arrangements” for further information on the convertible senior notes and warrants related to the issuance of convertible notes. In February 2014, our board of directors authorized a share repurchase program allowing us to repurchase up to $50 million of our common stock through February 28, 2015 (the “February 2014 Share Repurchase Program”). During the twelve months ended December 31, 2014, we completed the February 2014 Share Repurchase Program by repurchasing 805,392 shares at an average cost of $62.08 per share. In October 2014, our board of directors authorized an additional share repurchase program pursuant to which we may, from time to time, repurchase up to $50 million of our common stock through October 31, 2015 (the “October 2014 Share Repurchase Program”). In October 2015, our board of directors authorized an extension of the October 2014 Share Repurchase Program through October 31, 2016; and in December 2015, our board of directors increased the authorized amount to $125 million. The amount and timing of the repurchases will be determined by management and will depend on a variety of factors, including the trading price of our common stock, general market and business conditions, and applicable legal requirements. No shares were repurchased under this program in 2014. During the twelve months ended December 31, 2015, we repurchased 583,880 shares at an average cost of $59.24 per share. |
Restructuring Charges |
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Restructuring Charges | Restructuring Charges During 2015, we incurred $3.3 million of pretax restructuring expense. This expense primarily consisted of the following charges: Office exit costs - In 2015, we incurred $0.5 million of office exit costs primarily related to updated assumptions for the lease accrual of the Washington, D.C. space vacated in the fourth quarter of 2014. Severance - In 2015, we incurred $2.8 million of severance expense to better align our resources with market demand. Of the $3.3 million pretax restructuring expense, $1.2 million was incurred by our Healthcare segment, $1.1 million was incurred by our All Other segment as we wind down our public sector consulting practice and our foreign consulting operations based in the Middle East, and $1.0 million was incurred from corporate operations. During 2014, we incurred $2.8 million of pretax restructuring expense. This expense primarily consisted of the following charges: Office exit costs - In 2014, we incurred charges totaling $1.8 million related to the consolidation of office space in Washington, D.C., Chicago, and New York, and the closure of our office in San Diego. The charges primarily consisted of the accrual of remaining lease obligations at vacated spaces, net of estimated sublease income. The vacated locations in Chicago and New York were acquired as part of business acquisitions during 2013 and 2014. Accelerated depreciation - We incurred $0.9 million of accelerated depreciation expense on leasehold improvements at our vacated offices discussed above. Contract termination costs - In the fourth quarter of 2014, we paid $0.1 million for the early termination of certain telecom contracts related to the vacated office space in San Diego. All of the $2.8 million pretax restructuring expense incurred in 2014 was related to corporate operations. During 2013, we incurred $0.3 million of pretax restructuring expense. This expense primarily consisted of the early termination of certain computer lease contracts related to the integration of our Blue Stone acquisition. The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the years ended December 31, 2015 and 2014.
As of December 31, 2015, our restructuring charge liability related to office space reductions of $6.4 million represented the present value of remaining lease payments, net of estimated sublease income, primarily for our vacated office spaces in Washington, D.C., New York, and Houston. The $2.3 million restructuring charge liability related to employee costs at December 31, 2015 is expected to be paid in 2016. The restructuring charge liability is included as a component of accrued expenses and deferred compensation and other liabilities. |
Derivative Instruments and Hedging Activity |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activity | Derivative Instruments and Hedging Activity On December 8, 2011, we entered into a forward amortizing interest rate swap agreement effective on February 29, 2012 and ending on April 14, 2016. We entered into this derivative instrument to hedge against the interest rate risks of our variable-rate borrowings described in Note 7 “Financing Arrangements.” The swap had an initial notional amount of $56.6 million and amortizes throughout the term. 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 0.9875%. On May 30, 2012, we entered into an amortizing interest rate swap agreement effective on May 31, 2012 and ending on April 14, 2016. We entered into this derivative instrument to further hedge against the interest rate risks of our variable-rate borrowings. The swap had an initial notional amount of $37.0 million and amortizes throughout the term. 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 0.70%. On April 4, 2013, we entered into a forward amortizing interest rate swap agreement effective on March 31, 2014 and ending on August 31, 2017. We entered into this derivative instrument to further hedge against the interest rate risks of our variable-rate borrowings. The swap has an initial notional amount of $60.0 million and amortizes throughout the term. Under the terms of the interest rate swap agreement, we will receive from the counterparty interest on the notional amount based on one-month LIBOR and we will pay to the counterparty a fixed rate of 0.985%. ASC 815, Derivatives and Hedging, requires companies to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet. In accordance with ASC 815, we have designated these derivative instruments as cash flow hedges. As such, changes in the fair value of the derivative instruments are recorded as a component of other comprehensive income (“OCI”) to the extent of effectiveness and reclassified into interest expense upon settlement. The ineffective portion of the change in fair value of the derivative instruments is recognized in interest expense. As of December 31, 2015, it was anticipated that $0.1 million of the losses, net of tax, currently recorded in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. Our interest rate swap agreements were effective during the twelve months ended December 31, 2015, inclusive of consideration of our credit facility amendment discussed in Note 7 “Financing Arrangements.” The table below sets forth additional information relating to these interest rate swaps designated as cash flow hedging instruments as of December 31, 2015 and December 31, 2014.
All of the Company’s 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 the Company’s policy to record all derivative assets and liabilities on a gross basis on our consolidated balance sheet. All of the Company’s derivative instruments as of December 31, 2015 and 2014 were held with the same counterparty. We do not use derivative instruments for trading or other speculative purposes. Refer to Note 13 “Other Comprehensive Income (Loss)” for additional information on our derivative instruments. |
Fair Value of Financial Instruments |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain of our assets and liabilities are measured at fair value. ASC 820, Fair Value Measurements and Disclosures, defines fair value 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. ASC 820 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:
The table below sets forth the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014.
Promissory note: As part of the consideration received for the sale of our Accounting Advisory practice on December 30, 2011, the Company received a $3.5 million promissory note payable over four years. During the second quarter of 2014, we agreed to amend and restate the note such that principal payments will be paid to us annually based on the amount of excess cash flows earned each year by the maker of the note until the maturity date of December 31, 2018, at which time the remaining principal balance and any accrued interest is due. The fair value of the note is based on the net present value of the projected cash flows using a discount rate of 17%, which accounts for the risks associated with the note. The increase in the fair value of the note during 2015 reflects the accretion of interest income in excess of interest payments received. The portion of the note expected to be received in the next twelve months is recorded as a receivable in prepaid expenses and other current assets. The remaining portion of the note is recorded in other non-current assets. Interest rate swaps: The fair value of the interest rate swaps was 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 discount rates reflecting the risks involved. Convertible debt investment: In the third quarter of 2014, we invested $12.5 million, in the form of zero coupon convertible debt, in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight Education, 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 2015, we invested an additional $15.4 million in convertible notes of Shorelight, increasing the cost basis of our investment to $27.9 million. The notes will mature on July 1, 2020, unless converted earlier. 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 security in accordance with ASC 320, Investments—Debt and Equity Securities. The investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. We estimated the fair value of our investment using a Monte Carlo simulation model, cash flow projections discounted at a risk-adjusted rate, and certain assumptions related to equity volatility, default probability, and recovery rate, 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. An unrealized pretax gain of $7.1 million was recorded in other comprehensive income for the twelve months ended December 31, 2015. The fair value of the convertible debt investment is recorded in long-term investment. Contingent acquisition liability: We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted discounted cash flow model or a Monte Carlo simulation model, as appropriate. These fair value measurements are based on significant inputs not observed in the market and thus represents a Level 3 measurement. 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 and discount rates. The fair value of the contingent consideration is reassessed on a quarterly basis 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 the earnings of that period. During the year ended December 31, 2015, we recorded a $2.1 million contingent consideration liability for an acquisition that was completed during 2015. In addition, we determined that the fair value of another contingent consideration liability for a separate acquisition that was also completed during 2015 had declined to zero and recorded a remeasurement gain of $0.3 million. Refer to Note 5 “Goodwill and Intangible Assets” for information on the acquisitions completed in 2015. The fair value of the contingent acquisition liability is recorded in accrued consideration for business acquisitions. Financial assets and liabilities not recorded at fair value are as follows: Senior Secured Credit Facility The carrying value of our borrowings outstanding under 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 market rates as set forth in the Amended Credit Agreement. Refer to Note 7 “Financing Arrangements.” Convertible Notes The carrying amount and estimated fair value of the Convertible Notes are as follows (in thousands):
The difference between the $250 million principal amount of the Convertible Notes and the carrying amounts represents the unamortized debt discount. As of December 31, 2015 and 2014, the carrying value of the equity component of $39.3 million was unchanged from the date of issuance. Refer to Note 7 “Financing Arrangements” for additional details of our Convertible Notes. The estimated fair value of the Convertible Notes was determined based on the quoted bid price of the Convertible Notes in an over-the-counter market on December 31, 2015 and 2014, which is a Level 2 input. Based on the closing price of our common stock of $59.40 on December 31, 2015, the if-converted value of the Convertible Notes was less than the principal amount. Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled services, accounts payable, deferred revenues, and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short-term maturity of these items. |
Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The table below sets forth the components of accumulated other comprehensive income (loss), net of tax for the years ended December 31, 2015, 2014, and 2013.
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Employee Benefit and Deferred Compensation Plans |
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Postemployment Benefits [Abstract] | |
Employee Benefit and Deferred Compensation Plans | Employee Benefit and Deferred Compensation Plans We sponsor a qualified defined contribution 401(k) plan covering substantially all of our employees. Under the plan, employees are entitled to make pretax contributions. We match an amount equal to the employees’ contributions up to 6% of the employees’ salaries. Our matching contributions, including those related to our discontinued operations, for the years ended December 31, 2015, 2014, and 2013 were $17.8 million, $16.2 million, and $13.8 million, respectively. We have a non-qualified deferred compensation plan (the “Plan”) that is administered by our board of directors or a committee designated by the board of directors. Under the Plan, members of the board of directors and a select group of our employees may elect to defer the receipt of their director retainers and meeting fees or base salary and bonus, as applicable. Additionally, we may credit amounts to a participant’s deferred compensation account in accordance with employment or other agreements entered into between us and the participant. At our sole discretion, we may, but are not required to, credit any additional amount we desire to any participant’s deferred compensation account. Amounts credited are subject to vesting schedules set forth in the Plan, employment agreement or any other agreement entered into between us and the participant. The deferred compensation liability at December 31, 2015 and 2014 was $13.1 million and $7.5 million, respectively. |
Equity Incentive Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plans | Equity Incentive Plans In 2012, Huron adopted the 2012 Omnibus Incentive Plan (the “2012 Plan”), in order to increase the number of shares of common stock available as equity compensation to employees, non-employee directors, and independent contractors, and to make certain updates to reflect changes in market practices. The 2012 Plan permits the grant of stock options, stock appreciation rights, restricted stock, performance shares and other share-based or cash-based awards valued in whole or in part by reference to, or otherwise based on, our common stock. The 2012 Plan replaced, on a prospective basis, our 2004 Plan such that future grants will be granted under the 2012 Plan and any outstanding awards granted under the 2004 Plan that are cancelled, expired, forfeited, settled in cash, or otherwise terminated without a delivery of shares to the participant will not become available for grant under the 2012 Plan. The 2012 Plan was amended on May 2, 2014 to increase the number of shares authorized for issuance by 850,000 shares. On May 1, 2015, we adopted the Stock Ownership Participation Program (the “SOPP”), which is available to Huron employees below the managing director level who do not receive equity-based awards as part of their normal compensation plan. Under the SOPP, eligible employees may elect to use after-tax payroll deductions, or cash contributions, to purchase shares of the Company’s common stock on certain designated purchase dates. Employees who purchase stock under the SOPP are granted restricted stock equal to 25% of their purchased shares. Vesting of the restricted stock is subject to both a time-based vesting schedule and requirement that the purchased shares be held for a specified holding period. The initial shares available for issuance under the SOPP was 300,000. Prior to adopting the SOPP, the matching share grants and the employee purchased shares under the stock ownership participation program were governed by the 2012 Plan. As of December 31, 2015, approximately 1.2 million shares remain available for issuance under the 2012 Plan and SOPP. It has been our practice to issue shares of common stock upon exercise of stock options and granting of restricted stock from authorized but unissued shares, with the exception of the SOPP under which shares are issued from treasury stock. The Compensation Committee of the board of directors has the responsibility of interpreting the 2012 Plan and SOPP and determining all of the terms and conditions of awards made under the plans, including when the awards will become exercisable or otherwise vest. In the fourth quarter of 2013, the Compensation Committee amended certain share-based awards outstanding under our 2012 Plan and our 2004 Plan to provide for a retirement eligibility provision. Under this provision, eligible employees who have reached 62 years of age and have completed seven years of employment with the Company will continue vesting in their share-based awards after retirement, subject to certain conditions. This retirement eligibility provision will also apply to future awards granted to eligible employees under the 2012 Plan. Total share-based compensation cost recognized for the years ended December 31, 2015, 2014, and 2013 was $19.2 million, $18.8 million, and $16.0 million, respectively, with related income tax benefits of $7.6 million, $7.4 million, and $6.3 million, respectively. As of December 31, 2015, there was $24.3 million of total unrecognized compensation cost related to nonvested share-based awards. This cost is expected to be recognized over a weighted average period of 2.4 years. Stock Options During 2013, the Company granted stock option awards to certain named executive officers. No stock option awards were granted in 2014 and 2015. The exercise prices of stock options are equal to the fair value of a share of common stock on the date of grant. Subject to acceleration under certain conditions, our stock options vest annually over four years. All stock options have a ten-year contractual term. The fair value of the options granted during 2013 were calculated using the Black-Scholes option-pricing model using the following assumptions:
Expected volatility was based on our historical stock prices, the historical volatility of comparable companies, and implied volatilities from traded options in our stock. The risk-free interest rate was based on the rate of U.S. Treasury bills with equivalent expected terms of the stock options at the time of the option grant. The expected option life was estimated using the simplified method. The simplified method was used due to the lack of sufficient historical data available to provide a reasonable basis upon which to estimate the expected term. Stock option activity for the year ended December 31, 2015 was as follows:
The weighted average grant date fair value of stock options granted during the year ended December 31, 2013 was $17.46. No stock options were granted in 2014 and 2015. The aggregate intrinsic value of options exercised during 2014 and 2013 was $1.6 million and $1.7 million, respectively. No options were exercised in 2015. Restricted Stock Awards The grant date fair values of our restricted stock awards are measured pursuant to ASC 718 and amortized into expense over the service period. Subject to acceleration under certain conditions, the majority of our restricted stock vests annually over four years. The table below summarizes the restricted stock activity for the year ended December 31, 2015, which includes activity related to our discontinued operations. As of December 31, 2015, there were no nonvested restricted stock awards outstanding related to our discontinued operations.
The aggregate fair value of restricted stock that vested during the years ended December 31, 2015, 2014, and 2013 was $23.9 million, $19.8 million, and $14.3 million, respectively. The weighted average grant date fair value per share of restricted stock granted during 2014 and 2013 was $66.21 and $39.76, respectively. Performance-based Share Awards During 2015, 2014, and 2013, the Company granted performance-based share awards to our named executive officers and certain managing directors. The total number of shares earned by recipients of these awards is contingent upon meeting practice and Company-wide performance goals. Following the performance period, the awards are subject to the completion of a service period, which is generally an additional two to three years. The earned awards vest on a graded vesting schedule over the service period. For certain performance awards, the recipients may earn additional shares of stock for performance achieved above the stated target. The grant date fair values of our performance-based share awards are measured based on the fair value of our common stock at grant date. Compensation cost is amortized into expense over the service period. The table below summarizes the performance-based stock activity for the year ended December 31, 2015, which includes activity related to our discontinued operations. As of December 31, 2015, there were no nonvested performance-based stock awards outstanding related to our discontinued operations.
The aggregate fair value of performance-based stock that vested during the years ended December 31, 2015, 2014, and 2013 was $6.5 million, $5.2 million, and $3.6 million, respectively. The weighted average grant date fair value per share of performance-based stock granted during 2014 and 2013 was $64.52 and $39.19, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The income tax expense for continuing operations for the years ended December 31, 2015, 2014, and 2013 consists of the following:
The components of income from continuing operations before income tax expense were as follows:
A reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations is as follows:
In the fourth quarter of 2015, we made a tax election to classify two of our wholly-owned foreign subsidiaries as disregarded entities for U.S. federal income tax purposes (commonly referred to as a “check-the-box” election). As a result of this election, we expect to realize an income tax benefit of $13.0 million, of which $0.7 million is unrecognized, resulting in a net recognized tax benefit of $12.3 million. The effective tax rate for discontinued operations in 2015 was 169.0%, based on tax expense of $1.8 million, and was higher than the statutory tax rate primarily due to the tax expense recognized from the sale of the Huron Legal segment. Refer to Note 3 "Discontinued Operations" for further detail on the sale of the Huron Legal segment. The effective tax rate for discontinued operations in 2014 was 7.2%, based on tax expense of $2.5 million, and was lower than the statutory tax rate primarily due to the impact of a "check-the-box" election made in the first quarter of 2014. As a result of this election, we realized an income tax benefit of $13.8 million, of which $2.4 million is unrecognized, resulting in a net recognized tax benefit for discontinued operations of $11.4 million. The effective tax rate for discontinued operations in 2013 was 50.2% based on tax expense of $15.0 million. The net deferred tax liabilities for continuing operations at December 31, 2015 and 2014 consist of the following:
As of December 31, 2015 and 2014, we had valuation allowances of $2.2 million and $2.4 million, respectively, primarily due to uncertainties relating to the ability to utilize deferred tax assets recorded for foreign losses and foreign tax credits. The Company has federal net operating losses of $1.4 million which expire in 2029 and state net operating loss carry-forwards of $0.6 million which will expire between 2029 and 2030. The Company also has federal and state tax credit carry-forwards of $1.9 million which expire in 2021 and 2020, respectively. In accordance with ASC 740, Income Taxes, we recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. A reconciliation of our beginning and ending amount of unrecognized tax benefits is as follows:
Of the $3.2 million of unrecognized tax benefits at December 31, 2015, $0.8 million would affect the effective tax rate of continuing operations and $2.4 million would affect the effective tax rate of discontinued operations, if recognized. We do not expect that changes in the liability for unrecognized tax benefits during the next 12 months will have a significant impact on our financial position or results of operations. As of December 31, 2015 and 2014, an immaterial amount was accrued for the potential payment of interest and penalties. Accrued interest and penalties are recorded as a component of provision for income taxes on our consolidated statement of operations. We file income tax returns with federal, state, local and foreign jurisdictions. Tax years 2012, 2013, and 2014 are subject to future examinations by federal tax authorities. Tax years 2009 through 2014 are subject to future examinations by state and local tax authorities. The Company is currently under audit by the states of Illinois, New York, and Florida. Our foreign income tax filings are subject to future examinations by the local foreign tax authorities for tax years 2007 through 2014. |
Commitments, Contingencies and Guarantees |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Lease Commitments We lease office space under non-cancelable operating lease arrangements expiring on various dates through 2026, with various renewal options. Our principal executive offices located in Chicago, Illinois are under a lease expiring in September 2024. We have a five-year renewal option that will allow us to continue to occupy this office space until September 2029. Office facilities under operating leases include fixed or minimum payments plus, in some cases, scheduled base rent increases over the term of the lease. Certain leases require monthly payments of real estate taxes, insurance and other operating expenses applicable to the property. Some of the leases contain provisions whereby the future rental payments may be adjusted for increases in operating expenses above the specified amount. Rental expense, including operating costs and taxes, for the years ended December 31, 2015, 2014, and 2013 was $12.3 million, $9.8 million, and $8.2 million, respectively. Future minimum rental commitments under non-cancelable leases and sublease income as of December 31, 2015, are as follows:
Litigation Tamalluk Business Development LLC v. Huron Consulting Services LLC (Abu Dhabi Court of First Instance) On August 22, 2013, we learned that Tamalluk Business Development LLC, who was Huron’s agent in Abu Dhabi, and its principal, Mubarak Ahmad Bin Hamouda Al Dhaheri, filed a claim against Huron Consulting Services LLC in the Abu Dhabi Court of First Instance. The lawsuit alleged that under the agency agreement, Tamalluk was entitled to a commission on certain amounts that Huron collected from Abu Dhabi clients, and that Huron breached the agreement with Tamalluk and caused damages by declining to enter into a client engagement in Abu Dhabi and subsequently terminating the agency agreement with Tamalluk. Claimants alleged they were entitled to $50 million for damage to reputation and defamation and another $50 million for breach of contract. Huron submitted its written response on September 25, 2013. The response stated that Huron had the right to terminate the agency agreement with Tamalluk, and Huron had the sole discretion whether to accept or reject an engagement. Huron also filed a counterclaim on October 10, 2013 seeking a judicial order to permit the cancellation of Huron’s commercial license to allow Huron to cease doing business in Abu Dhabi. On December 17, 2013, the Abu Dhabi court ruled in Huron’s favor on all claims and held that Huron permissibly terminated the contract with Tamalluk and Huron did not owe Tamalluk any compensation related to Tamalluk’s claims. In addition, the court terminated the Local Sponsorship Agreement as requested by Huron in its counterclaim. Tamalluk appealed the decision, and on March 18, 2014, the appellate court upheld the decision in Huron’s favor. Tamalluk filed an appeal on May 18, 2014 to the Court of Cassation, which is the highest court in Abu Dhabi. On October 21, 2014, the Court of Cassation referred the case back to the appellate court for consideration of Claimants’ allegations relating to damage to reputation and defamation, which the appellate court had not previously addressed. The Court of Cassation ruled in Huron’s favor on the other claims and on Huron’s counterclaim. On October 13, 2015, the appellate court ruled in Huron's favor and denied Tamalluk's claims for damage to reputation and defamation. Tamalluk did not appeal to the Court of Cassation in the time period prescribed by law, and therefore the litigation is concluded. Physiotherapy Associates In 2011, Huron was engaged to design and implement new processes, software, tools, and techniques to assist Physiotherapy Associates, Inc. (“PA”) in reducing older accounts receivable levels and optimizing cash flow. The engagement agreement specifically provided that Huron will not be auditing financial statements and that Huron’s services are not designed, and should not be relied on, to disclose weaknesses in internal controls, financial statement errors, irregularities, illegal acts, or disclosure deficiencies. In November 2013, Physiotherapy Holdings, Inc., and certain subsidiaries and affiliates (including PA) filed a voluntary petition for bankruptcy pursuant to Chapter 11 of the Bankruptcy Code, which resulted in part from claims related to an alleged overstatement of PA’s revenues and profitability in connection with the sale of PA in 2012. The Joint Prepackaged Plan of Reorganization (the “Plan”), which was confirmed by the Bankruptcy Court in December 2013, established and funded a Litigation Trust to pursue certain claims on behalf of certain beneficiaries. The Plan disclosed a lengthy list of potential defendants and witnesses regarding these claims, including but not limited to the debtors’ officers, directors, certain employees, former owners, investment bankers, auditors, and various consultants. This list of potential defendants and witnesses included Huron, as well as three of Huron’s current or former employees. The Plan suggested that Huron, among others, was involved in “actively marketing PA” for sale and provided opinions to unnamed parties “defending the quality of PA’s earnings.” While we believe that we have meritorious defenses, to avoid the time and expense of protracted litigation, in September 2015 we reached an agreement with the Litigation Trust to settle the matter for $3.6 million. As a result, in the third quarter of 2015 we increased our accrued liability from $1.3 million to $3.6 million, and increased our insurance receivable from $0.5 million to $2.8 million. The settlement agreement has been finalized and approved by the Bankruptcy Court. Other Litigation During the fourth quarter of 2015, we settled two lawsuits brought by Huron, resulting in a gain of $10.0 million being recorded. We collected the $10.0 million in January 2016. From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, e are not a party to any other litigation or legal proceeding that, in the current opinion of management, could have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. Guarantees Guarantees in the form of letters of credit totaling $4.8 million and $5.1 million were outstanding at December 31, 2015 and 2014, respectively, to support certain office lease obligations as well as Middle East performance and bid bonds. In connection with certain business acquisitions, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreement. As of December 31, 2015 and 2014, the estimated fair value of our contingent consideration liability was $2.1 million and $0.2 million, respectively. To the extent permitted by law, our bylaws and articles of incorporation require that we indemnify our officers and directors against judgments, fines and amounts paid in settlement, including attorneys’ fees, incurred in connection with civil or criminal action or proceedings, as it relates to their services to us if such person acted in good faith. Although there is no limit on the amount of indemnification, we may have recourse against our insurance carrier for certain payments made. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Segments are defined by ASC 280, Segment Reporting, as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker manages the business under four operating segments, which are our reportable segments: Huron Healthcare, Huron Education and Life Sciences, Huron Business Advisory, and All Other.
Our Huron Healthcare segment provides strategic advisory, consulting, and technology solutions to national and regional hospitals and integrated health systems, academic medical centers, community hospitals, and physician practices. We deliver solutions to address challenges in the rapidly evolving healthcare environment to improve quality and patient outcomes, increase revenue, reduce expenses, and enhance physician, patient, and employee satisfaction across the healthcare enterprise. By partnering with healthcare organizations, we design solutions that teach providers how to achieve cultural transformation and deliver and sustain improvement in clinical outcomes and financial results. Our people provide a depth of expertise across the healthcare industry, and our culture of collaboration extends to our client engagements, enabling teams to effectively implement successful client projects.
Our Huron Education and Life Sciences segment provides management consulting services and technology solutions to the higher education, academic medical center, pharmaceutical and medical device, and research industries. We work with our clients to develop and implement strategic priorities, performance improvement, technology, and research enterprise solutions to help them address challenges relating to financial management, strategy, operational and organizational effectiveness, research administration, and regulatory compliance.
Our Huron Business Advisory segment provides services to the C-suite of middle market and large organizations, lending institutions, law firms, investment banks, and private equity firms. We assist clients in a broad range of industries and across the spectrum from healthy, well-capitalized companies to organizations in transition, and to creditors, owners, and other key constituents. Also included in the Huron Business Advisory segment is our Enterprise Performance Management and Analytics practice, which delivers solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client experience. With expertise in full-service enterprise performance management (EPM), business analytics, customer relationship management (CRM), and big data professional services, Huron's global presence and remote delivery capabilities help clients drive results and gain a competitive advantage.
Our All Other segment consists of any line of business not managed by our other three operating segments. These businesses include our public sector consulting practice and our foreign consulting operations based in the Middle East, both of which we wound down in 2015. Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue and selling, general and administrative costs that are incurred directly by the segment. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include costs for corporate office support, certain office facility costs, costs relating to accounting and finance, human resources, legal, marketing, information technology, and Company-wide business development functions, as well as costs related to overall corporate management. The table below sets forth information about our operating segments along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. We do not present financial information by geographic area because our international operations are immaterial. Refer to Note 3 “Discontinued Operations” for information on the divestiture of the Huron Legal segment completed in 2015.
N/M – Not Meaningful
For the years ended December 31, 2015, 2014, and 2013, substantially all of our revenues and long-lived assets were attributed to or located in the United States. No single client generated greater than 10% of our consolidated revenues for the years ended December 31, 2015, 2014, and 2013. At December 31, 2015 and 2014, no single client’s total receivables and unbilled services balance represented greater than 10% of our total receivables and unbilled services balance. |
Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts | Valuation and Qualifying Accounts The following table summarizes the activity of the allowances for doubtful accounts and unbilled services and the valuation allowance for deferred tax assets:
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited)
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Subsequent Event |
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Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Effective February 1, 2016, we completed our acquisition of MyRounding Solutions LLC ("MyRounding"), a Denver, Colorado-based firm specializing in digital health solutions to improve patient care. The addition of MyRounding strengthens Huron’s cultural transformation services for healthcare providers and expands the integration of Huron’s software and consulting solutions. The results of operations of MyRounding will be included within the Huron Healthcare segment. We have not yet completed a valuation of the assets acquired and liabilities assumed in the acquisition. |
Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements reflect the financial position at December 31, 2015 and 2014, and the results of operations and cash flows for the years ended December 31, 2015, 2014, and 2013. Certain amounts reported in previous years have been reclassified to conform to the 2015 presentation. The consolidated financial statements include the accounts of Huron Consulting Group Inc. and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Actual results may differ from these estimates and assumptions. |
Revenue Recognition | Revenue Recognition We recognize revenues in accordance with ASC 605, Revenue Recognition. Under ASC 605, revenue is recognized when persuasive evidence of an arrangement exists, the related services are provided, the price is fixed or determinable, and collectability is reasonably assured. We generate the majority of our revenues from providing professional services under four types of billing arrangements: fixed-fee (including software license revenue), time-and-expense, performance-based, and software support and maintenance and subscriptions. In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. It is the client's expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances. We generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach, which is based on work completed to-date versus our estimates of the total services to be provided under the engagement. Contracts within our Studer Group solution are fixed-fee partner contracts with multiple deliverables, which primarily consist of coaching services, as well as seminars, materials and software products (“Partner Contracts”). Revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract. All other revenues under Partner Contracts are recognized at the time the service is provided. Estimates of total engagement revenues and cost of services are monitored regularly during the term of the engagement. If our estimates indicate a potential loss, such loss is recognized in the period in which the loss first becomes probable and reasonably estimable. We also generate revenues from software licenses for our revenue cycle management software and research administration and compliance software. Licenses for our revenue cycle management software are sold only as a component of our consulting projects, and the services we provide are essential to the functionality of the software. Therefore, revenues from these software licenses are recognized over the term of the related consulting services contract in accordance with ASC 605. License revenue from our research administration and compliance software is recognized in accordance with ASC 985-605, generally in the month in which the software is delivered. Time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and publication orders purchased by our clients outside of Partner Contracts within our Studer Group solution. We recognize revenues under time-and-expense arrangements as the related services or publications are delivered. In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We do not recognize revenues under performance-based billing arrangements until all related performance criteria are met. Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance. We also generate subscription revenue from our cloud-based analytic tools and solutions. The software support and maintenance and subscription-based revenues are recognized ratably over the support or subscription period, which ranges from one to three years. These fees are billed in advance and included in deferred revenues until recognized. We have arrangements with clients in which we provide multiple elements of services under one engagement contract. Revenues under these types of arrangements are allocated to each element based on the element’s fair value in accordance with ASC 605 and recognized pursuant to the criteria described above. Provisions are recorded for the estimated realization adjustments on all engagements, including engagements for which fees are subject to review by the bankruptcy courts. Expense reimbursements that are billable to clients are included in total revenues and reimbursable expenses, and typically an equivalent amount of reimbursable expenses are included in total direct costs and reimbursable expenses. Reimbursable expenses are primarily recognized as revenue in the period in which the expense is incurred. Subcontractors that are billed to clients at cost are also included in reimbursable expenses. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the accompanying consolidated balance sheets. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled services. Client prepayments and retainers are classified as deferred revenues and recognized over future periods as earned in accordance with the applicable engagement agreement. |
Allowances for Doubtful Accounts and Unbilled Services | Allowances for Doubtful Accounts and Unbilled Services We maintain allowances for doubtful accounts and for services performed but not yet billed based on several factors, including the estimated cash realization from amounts due from clients, an assessment of a client’s ability to make required payments, and the historical percentages of fee adjustments and write-offs by age of receivables and unbilled services. The allowances are assessed by management on a regular basis. We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client’s inability to make required payments on accounts receivables, we record the provision to selling, general and administrative expenses. |
Direct Costs and Reimbursable Expenses | Direct Costs and Reimbursable Expenses Direct costs and reimbursable expenses consist primarily of revenue-generating employee compensation and their related benefit and share-based compensation costs, the cost of outside consultants or subcontractors assigned to revenue-generating activities, other third-party costs directly attributable to our revenue-generating activities, and direct expenses to be reimbursed by clients. Direct costs and reimbursable expenses incurred on engagements are expensed in the period incurred. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments, including overnight investments and commercial paper, with original maturities of three months or less to be cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk To the extent receivables from clients become delinquent, collection activities commence. No single client balance is considered large enough to pose a material credit risk. The allowances for doubtful accounts and unbilled services are based upon the expected ability to collect accounts receivable, and bill and collect unbilled services. Management does not anticipate incurring losses on accounts receivable in excess of established allowances. See Note 18 “Segment Information” for concentration of accounts receivable and unbilled services. We hold our cash in accounts at multiple third-party financial institutions. These deposits, at times, may exceed federally insured limits. We review the credit ratings of these financial institutions, regularly monitor the cash balances in these accounts, and adjust the balances as appropriate. However, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. |
Investments | Investments Our long-term investment consists of our convertible debt investment in Shorelight Holdings, LLC. We classified the investment as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. The investment is carried at fair value with unrealized holding gains and losses reported in other comprehensive income (loss). When the investment is in an unrealized loss position, we assess whether the investment is other than temporarily impaired. We consider impairments to be other than temporary if they are related to significant credit deterioration or if it is likely we will sell the security before the recovery of its cost basis. We have not identified any other than temporary impairments for our convertible debt investment. In the event there are realized gains and losses or declines in value judged to be other than temporary, we will record the amount in earnings. See Note 12 “Fair Value of Financial Instruments” for further information on our convertible debt investment. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Software, computers, and related equipment are depreciated over an estimated useful life of two to four years. Furniture and fixtures are depreciated over five years. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the initial term of the lease. |
Software Development Costs | Software Development Costs We expense development costs for software products that will be sold, leased, or otherwise marketed until technological feasibility has been established. Similarly, we expense all development costs after the software is available for general release to customers. During the period between the establishment of technological feasibility and availability for general release to customers, software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized development costs are amortized in proportion to current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product. We classify capitalized development costs for software products to be sold, leased, or otherwise marketed as other non-current assets on our consolidated balance sheet. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a significant decline in forecasted operating results over an extended period of time. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. |
Intangible Assets Other Than Goodwill | Intangible Assets Other Than Goodwill We account for intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. This Topic requires that certain identifiable intangible assets be amortized over their expected useful lives using a method that reflects the economic benefit expected to be derived from the assets or on a straight-line basis. Intangible assets are reviewed for impairment in a similar manner to our long-lived assets described above. |
Goodwill | Goodwill For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. We have five reporting units, which consist of our Huron Healthcare, Huron Education and Life Sciences, and All Other operating segments, and our Financial Advisory practice and Enterprise Performance Management and Analytics (“EPM&A”) practice, which together make up our Huron Business Advisory operating segment. We test goodwill for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. We perform our annual goodwill impairment test as of November 30 and monitor for interim triggering events on an ongoing basis. |
Business Combinations | Business Combinations We use the acquisition method of accounting in accordance with ASC 805, Business Combinations. Each acquired company’s operating results are included in our consolidated financial statements starting on the date of acquisition. The purchase price is equivalent to the fair value of consideration transferred. Tangible and identifiable intangible assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed. Contingent consideration, which is primarily based on the business achieving certain performance targets, is recognized at its fair value on the acquisition date, and changes in fair value are recognized in earnings until settled. |
Deferred Lease Incentives | Deferred Lease Incentives We record as non-current the portion of the deferred lease incentive liability that we expect to recognize over a period greater than one year. The non-current portion of the deferred lease incentive liability totaled $10.0 million and $12.7 million at December 31, 2015 and 2014, respectively, and was primarily generated from tenant improvement allowances and rent abatement. Deferred lease incentives are amortized on a straight-line basis over the life of the lease. The portion of the deferred lease incentive corresponding to the rent payments that will be paid within 12 months of the balance sheet date is classified as current liabilities. We monitor the classification of such liabilities based on the expectation of their utilization periods. |
Income Taxes | Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes. Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets will not likely be recovered from future taxable income, a valuation allowance is established against such deferred tax assets. In accordance with ASC 740, Income Taxes, we recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. |
Share-Based Compensation | Share-Based Compensation We account for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based compensation cost is measured based on the grant date fair value of the respective awards. We generally recognize share-based compensation ratably using the straight-line attribution method; however, for those awards with performance criteria and graded vesting features, we use the graded vesting attribution method. We net share-based compensation expense with our estimated amount of expected forfeitures. |
Sponsorship and Advertising Costs | Sponsorship and Advertising Costs Sponsorship and advertising costs are expensed as incurred. |
Debt Issuance Costs | Debt Issuance Costs We amortize the costs we incur to obtain debt financing over the contractual life of the related debt using the effective interest method for non-revolving debt and the straight-line method for revolving debt. The amortization expense is included in interest expense, net of interest income in our statement of earnings. Unamortized debt issuance costs attributable to our revolving credit facility are included as a component of prepaid expenses and other current assets and other non-current assets. |
Foreign Currency | Foreign Currency Assets and liabilities of foreign subsidiaries whose functional currency is not the United States Dollar (USD) are translated into the USD using the exchange rates in effect at period end. Revenue and expense items are translated using the average exchange rates for the period. Foreign currency translation adjustments are included in accumulated other comprehensive loss, which is a component of stockholders’ equity. Foreign currency transaction gains and losses are included in other income, net on the statement of earnings. |
Segment Reporting | Segment Reporting ASC 280, Segment Reporting, establishes annual and interim reporting standards for an enterprise’s business segments and related disclosures about its products, services, geographic areas, and major customers. Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker manages the business under four operating segments, which are reportable segments: Huron Healthcare, Huron Education and Life Sciences, Huron Business Advisory, and All Other. |
New Accounting Pronouncements | New Accounting Pronouncements In January 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments to the guidance enhance the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The updated guidance is effective for us beginning January 1, 2018. We are currently evaluating the potential effect this guidance will have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred taxes in the statement of financial position. The amendments to the guidance require that deferred tax assets and liabilities be classified as noncurrent in a classified balance sheet. The updated guidance is effective for us beginning January 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. This guidance may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. We have elected to early adopt the amendments to this guidance beginning with this Annual Report on Form 10-K for the year ended December 31, 2015 and apply the amendments prospectively. As a result, we reclassed $14.5 million of net current deferred tax assets to non-current deferred income taxes, net on the consolidated balance sheet as of December 31, 2015. Prior periods were not retrospectively adjusted. In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in ASU 2015-05 provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for us beginning in the first quarter of 2016 with early adoption permitted. The guidance may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The amendments to the guidance require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements: Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarifies the treatment of debt issuance costs from line-of-credit arrangements after the adoption of ASU 2015-03. ASU 2015-15 clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This guidance is effective for us beginning in the first quarter of 2016 and will be applied on a retrospective basis. Upon adoption of these amendments, we expect to reclassify debt issuance costs of $1.2 million included in prepaid expenses and other current assets and $3.4 million included in other non-current assets to long-term debt, net of current portion on our consolidated balance sheet as of December 31, 2015. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810, Consolidation. ASU 2015-02 makes targeted amendments to the current consolidation guidance, which could change consolidation conclusions. This guidance will be effective for us beginning in the first quarter of 2016 and early adoption is permitted. We do not expect the adoption of this guidance to have any impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as a new Topic, ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09, as amended, is effective for us beginning in the first quarter of 2018 and is to be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption will be permitted as of the original effective date in ASU 2014-09 (i.e., annual reporting periods beginning after December 15, 2016). We are currently evaluating the potential effect of adopting this guidance on our consolidated financial statements, as well as the transition methods. |
Derivatives | ASC 815, Derivatives and Hedging, requires companies to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet. In accordance with ASC 815, we have designated these derivative instruments as cash flow hedges. As such, changes in the fair value of the derivative instruments are recorded as a component of other comprehensive income (“OCI”) to the extent of effectiveness and reclassified into interest expense upon settlement. The ineffective portion of the change in fair value of the derivative instruments is recognized in interest expense. |
Fair Value of Financial Instruments - (Policies) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||
Fair value measurement policy | Certain of our assets and liabilities are measured at fair value. ASC 820, Fair Value Measurements and Disclosures, defines fair value 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. ASC 820 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:
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Income Taxes - (Policies) |
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Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes. Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets will not likely be recovered from future taxable income, a valuation allowance is established against such deferred tax assets. In accordance with ASC 740, Income Taxes, we recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. |
Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Consideration Received | The sale closed on December 31, 2015, at which time we received proceeds of $110.1 million, which consisted of the following:
The acquisition date fair value of the consideration transferred for Studer Group was approximately $325.2 million, which consisted of the following:
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Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following table summarizes Huron Legal's assets and liabilities classified as discontinued operations as of December 31, 2014.
The table below summarizes the operating results of Huron Legal for the years ended December 31, 2015, 2014, and 2013.
(1) During 2015, the Huron Legal segment incurred a $13.3 million restructuring charge. Of the $13.3 million, $6.1 million related to accelerated depreciation on assets disposed of as a result of the sale, $5.1 million related to employee costs incurred in connection with the sale, $1.1 million related to the accrual of our remaining lease obligations for vacated spaces, net of estimated sublease income, and $1.0 million related to severance costs incurred from prior workforce reductions. (2) See Note 16 "Income Taxes" for additional detail on the income tax expense recognized for discontinued operations. The table below summarizes the amounts reflected in our consolidated statements of cash flows that relate to the discontinued operations for the years ended December 31, 2015, 2014, and 2013.
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Acquisitions (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Consideration Transferred | The sale closed on December 31, 2015, at which time we received proceeds of $110.1 million, which consisted of the following:
The acquisition date fair value of the consideration transferred for Studer Group was approximately $325.2 million, which consisted of the following:
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Preliminary Allocation of the Purchase Price to the Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the acquisition date.
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Schedule of Components of Identifiable Intangible Assets Acquired and their Estimated Useful Lives | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the acquisition date.
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Summary of Supplemental Pro Forma Consolidated Results of Operations | The following supplemental pro forma information summarizes the combined results of operations for Huron and Studer Group as though the companies were combined on January 1, 2014.
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Goodwill and Intangible Assets (Tables) |
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Changes in Carrying Amount of Goodwill | The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2015 and 2014.
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Intangible Assets | Intangible assets as of December 31, 2015 and 2014 consisted of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The table below sets forth the estimated annual amortization expense for the next five years for the intangible assets recorded as of December 31, 2015.
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Property and Equipment, Net (Tables) |
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Schedule of Property and Equipment | Property and equipment at December 31, 2015 and 2014 are detailed below:
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Financing Arrangements (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Carrying Amounts of Debt | A summary of the carrying amounts of our debt follows:
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Schedule of Maturities of Long-term Debt | A summary of the scheduled maturities of our debt follows:
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Schedule of Notes | As of December 31, 2015 and 2014, the Convertible Notes consisted of the following:
(1)Included in Additional paid-in capital on the consolidated balance sheet. |
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Summary of Interest Expense Recognized | The following table presents the amount of interest expense recognized related to the Convertible Notes:
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Earnings Per Share (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic and Diluted Earnings Per Share | Earnings per share under the basic and diluted computations are as follows:
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Summary of Anti-dilutive Securities Excluded from Computation of Weighted Average Common Stock Equivalents | The anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were as follows:
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Restructuring Charges - (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the years ended December 31, 2015 and 2014.
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Derivative Instruments and Hedging Activity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Interest Rate Swaps Designated as Cash Flow Hedging Instruments | The table below sets forth additional information relating to these interest rate swaps designated as cash flow hedging instruments as of December 31, 2015 and December 31, 2014.
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The table below sets forth the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014.
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Summary of Carrying Amount and Estimated Fair Value of Convertible Senior Notes | The carrying amount and estimated fair value of the Convertible Notes are as follows (in thousands):
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Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss, Net of Tax | The table below sets forth the components of accumulated other comprehensive income (loss), net of tax for the years ended December 31, 2015, 2014, and 2013.
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Equity Incentive Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Options Granted | The fair value of the options granted during 2013 were calculated using the Black-Scholes option-pricing model using the following assumptions:
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Schedule of Stock Option Activity | Stock option activity for the year ended December 31, 2015 was as follows:
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Schedule of Restricted Stock Activity | The table below summarizes the restricted stock activity for the year ended December 31, 2015, which includes activity related to our discontinued operations. As of December 31, 2015, there were no nonvested restricted stock awards outstanding related to our discontinued operations.
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Schedule of Performance-Based Stock Activity |
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Income Taxes (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense for Continuing Operations | The income tax expense for continuing operations for the years ended December 31, 2015, 2014, and 2013 consists of the following:
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Components of Income from Continuing Operations Before Income Tax Expense | The components of income from continuing operations before income tax expense were as follows:
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Reconciliation of Statutory Income Tax Rate to Our Effective Tax Rate for Continuing Operations | A reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations is as follows:
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Net Deferred Tax Liabilities for Continuing Operations | The net deferred tax liabilities for continuing operations at December 31, 2015 and 2014 consist of the following:
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Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of our beginning and ending amount of unrecognized tax benefits is as follows:
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Commitments, Contingencies and Guarantees (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Rental Commitments Under Non-Cancelable Leases and Sublease Income | Future minimum rental commitments under non-cancelable leases and sublease income as of December 31, 2015, are as follows:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Segment Information | The table below sets forth information about our operating segments along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. We do not present financial information by geographic area because our international operations are immaterial. Refer to Note 3 “Discontinued Operations” for information on the divestiture of the Huron Legal segment completed in 2015.
N/M – Not Meaningful |
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Segment Assets |
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Valuation and Qualifying Accounts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Allowances for Doubtful Accounts and Unbilled Services and Valuation Allowance for Deferred Tax Assets | The following table summarizes the activity of the allowances for doubtful accounts and unbilled services and the valuation allowance for deferred tax assets:
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Selected Quarterly Financial Data (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data |
|
Discontinued Operations - Fair Value of Consideration Received (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gross cash proceeds | $ 108,487 | $ 0 | $ 0 |
Loss on sale of business | 2,303 | 0 | 0 |
Discontinued operations [Member] | Huron Legal [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gross cash proceeds | 112,000 | ||
Estimated net working capital adjustment | 4,536 | ||
Transaction costs and other closing payments | (6,402) | ||
Consideration received | 110,134 | ||
Loss on sale of business | $ 2,303 | $ 0 | $ 0 |
Acquisitions - Summary of Fair Value of Consideration Transferred (Details) - Studer Group $ in Thousands |
Feb. 12, 2015
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Cash | $ 323,237 |
Acquisition date fair value | 2,204 |
Consideration transferred net working capital adjustment | (255) |
Acquisition date fair value of the consideration | $ 325,186 |
Acquisitions - Summary of Supplemental Pro Forma Consolidated Results of Operations (Details) - Studer Group - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Business Combination, Separately Recognized Transactions [Line Items] | ||
Business acquisition, pro forma revenue | $ 709,813 | $ 705,285 |
Business acquisition, pro forma net income (loss) | $ 63,600 | $ 44,495 |
Business acquisition, pro forma earnings per share, basic (in USD per share) | $ 2.87 | $ 1.98 |
Business acquisition, pro forma earnings per share, diluted (in USD per share) | $ 2.81 | $ 1.94 |
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Goodwill [Line Items] | ||||
Reassigned amount of goodwill | $ 0 | |||
Intangible assets amortization expense | $ 28,700 | 8,900 | $ 3,900 | |
Huron Business Advisory [Member] | ||||
Goodwill [Line Items] | ||||
Reassigned amount of goodwill | $ 16,700 | $ 16,744 |
Goodwill and Intangible Assets - Amortization (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 | $ 29,082 |
2017 | 25,069 |
2018 | 14,987 |
2019 | 9,427 |
2020 | $ 5,830 |
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation expense for property and equipment | $ 12.3 | $ 10.3 | $ 9.2 |
Property and Equipment, Net - Summary of Premises and Equipment (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 93,757 | $ 123,592 |
Accumulated depreciation and amortization | (64,869) | (92,901) |
Property and equipment, net | 28,888 | 30,691 |
Computers, related equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 48,033 | 65,464 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 32,163 | 40,701 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 12,891 | 15,908 |
Assets under Capital Lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 409 | 925 |
Assets under Construction [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 261 | $ 594 |
Financing Arrangements - Summary of Carrying Amounts of Debt (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 311,993 | $ 356,602 |
Current maturities of debt | 0 | (28,750) |
Long-term debt, net of current portion and debt issuance costs | 311,993 | 327,852 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 219,993 | 212,852 |
Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 92,000 | $ 143,750 |
Financing Arrangements Financing Arrangements - Summary of Debt Maturities (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2016 | $ 0 |
2017 | 0 |
2018 | 0 |
2019 | 250,000 |
2020 | $ 92,000 |
Financing Arrangements - Schedule of Notes (Detail) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
---|---|---|---|
Convertible Senior Notes [Line Items] | |||
Proceeds | $ 250,000,000 | $ 250,000,000 | |
Long-term debt | 311,993,000 | $ 356,602,000 | |
Senior Notes [Member] | |||
Convertible Senior Notes [Line Items] | |||
Proceeds | 250,000,000 | 250,000,000 | $ 250,000,000 |
Less: debt discount, net of amortization | (30,007,000) | (37,148,000) | |
Long-term debt | 219,993,000 | 212,852,000 | |
Equity component | $ 39,287,000 | $ 39,287,000 |
Financing Arrangements - Summary of Interest Expense Recognized (Detail) - Senior Notes [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Interest Expense Recognized [Line Items] | ||
Contractual interest coupon | $ 3,125 | $ 964 |
Amortization of debt issuance costs | 1,180 | 360 |
Amortization of debt discount | 7,141 | 2,139 |
Total interest expense recognized | $ 11,446 | $ 3,463 |
Capital Structure - Additional Information (Detail) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Equity [Abstract] | ||
Preferred stock, shares authorized | 50,000,000 | |
Preferred stock, shares approved or issued | 0 | 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Earnings Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Sep. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Per Share Reconciliation [Abstract] | ||||||||||||
Net income from continuing operations | $ 32,502 | $ 14,277 | $ 14,148 | $ 968 | $ 9,968 | $ 7,467 | $ 12,473 | $ 17,094 | $ 61,895 | $ 47,002 | $ 51,577 | |
Income (loss) from discontinued operations, net of tax | (2,843) | 32,049 | 14,856 | |||||||||
Net income | $ 19,343 | $ 19,374 | $ 18,833 | $ 1,502 | $ 12,793 | $ 12,219 | $ 19,913 | $ 34,126 | $ 59,052 | $ 79,051 | $ 66,433 | |
Weighted average common shares outstanding-basic | 22,093 | 22,107 | 22,220 | 22,126 | 22,010 | 22,488 | 22,645 | 22,588 | 22,136 | 22,431 | 22,322 | |
Weighted average common stock equivalents | 464 | 494 | 455 | |||||||||
Weighted average common shares outstanding- diluted | 22,551 | 22,592 | 22,654 | 22,602 | 22,548 | 22,975 | 23,098 | 23,086 | 22,925 | 22,600 | 22,925 | 22,777 |
Net earnings per basic share: | ||||||||||||
Net income from continuing operations, per basic share (in USD per share) | $ 1.47 | $ 0.65 | $ 0.64 | $ 0.04 | $ 0.45 | $ 0.33 | $ 0.55 | $ 0.76 | $ 2.80 | $ 2.10 | $ 2.31 | |
Income (loss) from discontinued operations, net of tax, per basic share (In USD per share) | (0.59) | 0.23 | 0.21 | 0.03 | 0.13 | 0.21 | 0.33 | 0.75 | (0.13) | 1.42 | 0.67 | |
Net income, per basic share (in USD per share) | 0.88 | 0.88 | 0.85 | 0.07 | 0.58 | 0.54 | 0.88 | 1.51 | 2.67 | 3.52 | 2.98 | |
Net earnings per diluted share: | ||||||||||||
Net income from continuing operations, per diluted share (in USD per share) | 1.44 | 0.63 | 0.62 | 0.04 | 0.44 | 0.33 | 0.54 | 0.74 | 2.74 | 2.05 | 2.26 | |
Income (loss) from discontinued operations, net of tax, per diluted share (in USD per share) | 0.13 | 0.20 | 0.32 | 0.74 | (0.13) | 1.40 | 0.66 | |||||
Net income, per diluted share (in USD per share) | $ 0.86 | $ 0.86 | $ 0.83 | $ 0.07 | $ 0.57 | $ 0.53 | $ 0.86 | $ 1.48 | $ 2.61 | $ 3.45 | $ 2.92 |
Earnings Per Share - Summary of Anti-dilutive Securities Excluded from Computation of Weighted Average Common Stock Equivalents (Detail) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 6,279 | 6,275 | 76 |
Restricted Stock Awards [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 21 | 17 | 0 |
Equity Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 0 | 0 | 76 |
Convertible Debt Investment [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 3,129 | 3,129 | 0 |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 3,129 | 3,129 | 0 |
Earnings Per Share - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Oct. 31, 2014 |
Feb. 28, 2014 |
|
February 2014 Share Repurchase Program [Member] | ||||
Accelerated Share Repurchases [Line Items] | ||||
Share repurchase authorized amount | $ 50,000,000 | |||
Shares repurchased | 805,392 | |||
Share repurchase average cost per share (in USD per share) | $ 62.08 | |||
October 2014 Share Repurchase Program [Member] | ||||
Accelerated Share Repurchases [Line Items] | ||||
Share repurchase authorized amount | $ 50,000,000 | |||
Shares repurchased | 0 | |||
December 2015 Share Repurchase Program [Member] | ||||
Accelerated Share Repurchases [Line Items] | ||||
Share repurchase authorized amount | $ 125,000,000 | |||
Shares repurchased | 583,880 | |||
Share repurchase average cost per share (in USD per share) | $ 59.24 |
Restructuring Charges Restructuring Charges - Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, period start | $ 2,210 | $ 850 |
Restructuring additions | 13,029 | 3,025 |
Payments for restructuring | (6,952) | (1,665) |
Restructuring reserve adjustments | 415 | 0 |
Restructuring reserve, period end | 8,702 | 2,210 |
Employee costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, period start | 6 | 98 |
Restructuring additions | 7,209 | 188 |
Payments for restructuring | (4,938) | (280) |
Restructuring reserve adjustments | 46 | 0 |
Restructuring reserve, period end | 2,323 | 6 |
Office space reductions [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, period start | 2,204 | 752 |
Restructuring additions | 5,820 | 2,837 |
Payments for restructuring | (2,014) | (1,385) |
Restructuring reserve adjustments | 369 | 0 |
Restructuring reserve, period end | $ 6,379 | $ 2,204 |
Derivative Instruments and Hedging Activity - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Apr. 04, 2013 |
May. 30, 2012 |
Dec. 08, 2011 |
Dec. 31, 2015 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Interest rate swap agreement, effective date | Mar. 31, 2014 | May 31, 2012 | Feb. 29, 2012 | |
Interest rate swap agreement, end date | Aug. 31, 2017 | Apr. 14, 2016 | Apr. 14, 2016 | |
Interest rate swap agreement for a notional amount | $ 60,000,000.0 | $ 37,000,000.0 | $ 56,600,000.0 | |
Duration of LIBOR | 1 month | 1 month | 1 month | |
Percentage of fixed rate | 0.985% | 0.70% | 0.9875% | |
Anticipated net losses, net of tax, currently recorded in accumulated other comprehensive loss reclassified into earnings | $ 100,000 | |||
Loss reclassification from accumulated OCI to income, estimate of time to transfer | 12 months |
Derivative Instruments and Hedging Activity - Fair Value Interest Rate Swaps Designated as Cash Flow Hedging Instruments (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Other non-current assets [Member] | ||
Fair Value interest rate swaps designated as cash flow hedging instruments | ||
Fair value (derivative asset and liability) | $ 86 | $ 516 |
Accrued expenses [Member] | ||
Fair Value interest rate swaps designated as cash flow hedging instruments | ||
Fair value (derivative asset and liability) | 242 | 643 |
Deferred compensation and other liabilities [Member] | ||
Fair Value interest rate swaps designated as cash flow hedging instruments | ||
Fair value (derivative asset and liability) | $ 0 | $ 10 |
Fair Value of Financial Instruments - Summary of Carrying Amount and Estimated Fair Value of Convertible Notes (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 311,993 | $ 356,602 |
Senior Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 219,993 | 212,852 |
Estimated fair value | $ 248,010 | $ 261,903 |
Other Comprehensive Income (Loss) - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustment, tax | $ (33) | $ 111 | $ 48 |
Unrealized loss on investments, tax | (2,709) | 0 | |
Change in fair value, tax | 327 | 341 | (83) |
Reclassification adjustment into earnings, tax | $ (320) | $ (347) | $ (223) |
Employee Benefit and Deferred Compensation Plans - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Postemployment Benefits [Abstract] | |||
Employer contributions up to percent of employee's salaries | 6.00% | ||
Employer matching contributions | $ 17.8 | $ 16.2 | $ 13.8 |
Deferred compensation liability | $ 13.1 | $ 7.5 |
Equity Incentive Plans - Fair Value of Options Granted (Detail) - Black-Scholes option-pricing model [Member] |
12 Months Ended |
---|---|
Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Method Used [Line Items] | |
Expected dividend yield | 0.00% |
Expected volatility | 45.00% |
Risk-free rate | 1.10% |
Expected option life (in years) | 6 years 3 months |
Equity Incentive Plans - Schedule of Restricted Stock Activity (Detail) - Restricted Stock Awards [Member] - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Number of Shares (in thousands) | |||
Nonvested stock, number of shares, beginning balance | 780 | ||
Granted, number of shares | 307 | ||
Vested, number of shares | (363) | ||
Forfeited, number of shares | (56) | ||
Nonvested stock, number of shares, ending balance | 668 | 780 | |
Weighted Average Grant Date Fair Value (in dollars) | |||
Nonvested stock, weighted average grant date fair value, beginning balance (in USD per share) | $ 50.61 | ||
Weighted average grant date fair value (in USD per share) | 66.21 | $ 66.21 | $ 39.76 |
Vested, weighted average grant date fair value (in USD per share) | 46.57 | ||
Forfeited, weighted average grant date fair value (in USD per share) | 57.40 | ||
Nonvested stock, weighted average grant date fair value, ending balance (in USD per share) | $ 59.41 | $ 50.61 |
Equity Incentive Plans - Schedule of Performance-Based Stock Activity (Detail) - Performance-based stock activity [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Number of Shares (in thousands) | |||
Nonvested stock, number of shares, beginning balance | 236,000 | ||
Granted, number of shares | 162,000 | ||
Vested, number of shares | (98,000) | ||
Forfeited, number of shares | (66,000) | ||
Nonvested stock, number of shares, ending balance | 234,000 | 236,000 | |
Weighted Average Grant Date Fair Value (in dollars) | |||
Nonvested stock, weighted average grant date fair value, beginning balance (in USD per share) | $ 55.55 | ||
Weighted average grant date fair value (in USD per share) | 66.63 | $ 64.52 | $ 39.19 |
Vested, weighted average grant date fair value (in USD per share) | 47.67 | ||
Forfeited, weighted average grant date fair value (in USD per share) | 66.21 | ||
Nonvested stock, weighted average grant date fair value, ending balance (in USD per share) | $ 63.54 | $ 55.55 |
Equity Incentive Plans - Schedule of Performance-Based Stock Activity (Additional Information) (Detail) - Performance-based stock activity [Member] - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares earned above the target | 8,100 | |||
Nonvested performance-based shares outstanding | 234,000 | 236,000 | ||
Nonvested and unearned shares | 178,100 | |||
Forfeited, number of shares | (66,000) | |||
Aggregate fair value of stock vested | $ 6.5 | $ 5.2 | $ 3.6 | |
Scenario, forecast [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Forfeited, number of shares | (111,041) |
Income Taxes - Income Tax Expense for Continuing Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current: | |||
Federal | $ 4,806 | $ 16,361 | $ 19,760 |
State | 2,380 | 4,881 | 4,642 |
Foreign | 350 | (175) | (205) |
Total current | 7,536 | 21,067 | 24,197 |
Deferred: | |||
Federal | 12,450 | 10,637 | 6,953 |
State | 1,482 | 1,170 | 995 |
Foreign | 202 | 185 | 55 |
Total deferred | 14,134 | 11,992 | 8,003 |
Income tax expense for continuing operations | $ 21,670 | $ 33,059 | $ 32,200 |
Income Taxes - Components of Income from Continuing Operations Before Income Tax Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 85,164 | $ 83,851 | $ 88,664 |
Foreign | (1,599) | (3,790) | (4,887) |
Income from continuing operations before income tax expense | $ 83,565 | $ 80,061 | $ 83,777 |
Income Taxes - Reconciliation of Statutory Income Tax Rate to Our Effective Tax Rate for Continuing Operations (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
At U.S. statutory tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 4.60% | 4.50% | 3.90% |
Meals and entertainment | 0.60% | 0.60% | 0.50% |
Valuation allowance | 0.50% | 1.20% | 0.60% |
Foreign source income | 0.50% | 0.90% | 0.20% |
Tax credits / Section 199 Deduction | (1.00%) | (0.90%) | (1.10%) |
Net tax (benefit) expense related to “check-the-box” election | (14.70%) | 0.40% | 0.00% |
Other | 0.40% | (0.40%) | (0.70%) |
Effective income tax expense rate for continuing operations | 25.90% | 41.30% | 38.40% |
Income Taxes - Net Deferred Tax Liabilities for Continuing Operations (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax assets: | ||
Share-based compensation | $ 10,234 | $ 10,234 |
Accrued payroll and other liabilities | 9,074 | 8,215 |
Deferred lease incentives | 4,691 | 6,143 |
Convertible note hedge transactions | 12,690 | 15,582 |
Revenue recognition | 1,611 | 2,074 |
Net operating loss carry-forwards | 529 | 2,069 |
Tax credits | 1,935 | 1,182 |
Deferred Tax Assets, Other | 3,632 | 1,084 |
Total deferred tax assets | 44,396 | 46,583 |
Valuation allowance | (2,242) | (2,431) |
Net deferred tax assets | 42,154 | 44,152 |
Deferred tax liabilities: | ||
Prepaid expenses | (2,943) | (3,316) |
Property and equipment | (2,406) | (4,037) |
Intangibles and Goodwill | (56,584) | (33,288) |
Convertible note discount | (11,793) | (14,562) |
Other | (3,116) | (926) |
Total deferred tax liabilities | (76,842) | (56,129) |
Net deferred tax liability for continuing operations | $ (34,688) | $ (11,977) |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 2,488 | $ 411 | $ 441 |
Additions based on tax positions related to the prior years | 40 | ||
Decrease based on tax positions related to the prior year | (333) | (51) | |
Decrease based on settlements with taxing authorities | (19) | ||
Additions based on tax positions related to the current year | 735 | 2,410 | |
Unrecognized tax benefits, ending balance | $ 3,223 | $ 2,488 | $ 411 |
Commitments, Contingencies and Guarantees - Future Minimum Rental Commitments Under Non-Cancelable Leases and Sublease Income (Detail) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease obligations, 2016 | $ 16,896 |
Operating lease obligations, 2017 | 12,392 |
Operating lease obligations, 2018 | 10,795 |
Operating lease obligations, 2019 | 8,345 |
Operating lease obligations, 2020 | 8,112 |
Operating lease obligations, thereafter | 26,505 |
Operating lease obligations, total | 83,045 |
Sublease income, 2016 | 2,943 |
Sublease income, 2017 | 1,141 |
Sublease income, 2018 | 945 |
Sublease income, 2019 | 0 |
Sublease income, 2020 | 0 |
Sublease income, thereafter | 0 |
Sublease income, total | $ 5,029 |
Segment Information - Additional Information (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
client
Segment
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Dec. 31, 2014
client
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Dec. 31, 2013
client
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Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 4 | ||
Customer concentration risk [Member] | Combined receivables and unbilled service balances [Member] | Minimum [Member] | |||
Segment Reporting Information [Line Items] | |||
Customer percentage of consolidated receivables and unbilled services or consolidated net sales revenue | 10.00% | 10.00% | 10.00% |
Number of customers | 0 | 0 | 0 |
Customer concentration risk [Member] | Sales revenue, net [Member] | Minimum [Member] | |||
Segment Reporting Information [Line Items] | |||
Customer percentage of consolidated receivables and unbilled services or consolidated net sales revenue | 10.00% | 10.00% | 10.00% |
Number of customers | 0 | 0 | 0 |
Segment Information - Segment Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Segment Assets: | ||
Total assets | $ 1,164,160 | $ 1,155,914 |
Segment reconciling items [Member] | ||
Segment Assets: | ||
Total assets | 1,022,271 | 995,238 |
Huron Healthcare [Member] | Operating segments [Member] | ||
Segment Assets: | ||
Total assets | 84,088 | 112,190 |
Huron Education and Life Sciences [Member] | Operating segments [Member] | ||
Segment Assets: | ||
Total assets | 35,916 | 28,973 |
Huron Business Advisory [Member] | Operating segments [Member] | ||
Segment Assets: | ||
Total assets | 21,885 | 19,134 |
All Other [Member] | Operating segments [Member] | ||
Segment Assets: | ||
Total assets | $ 0 | $ 379 |
Valuation and Qualifying Accounts - Summary of Allowances for Doubtful Accounts and Unbilled Services and Valuation Allowance for Deferred Tax Assets (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Allowances for doubtful accounts and unbilled services [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | $ 14,129 | $ 9,925 | $ 6,675 |
Additions | 40,003 | 36,044 | 28,948 |
Deductions | 37,246 | 31,840 | 25,698 |
Ending balance | 16,886 | 14,129 | 9,925 |
Valuation allowance for deferred tax assets [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | 2,431 | 1,406 | 1,290 |
Additions | 1,212 | 1,025 | 116 |
Deductions | 1,401 | 0 | 0 |
Ending balance | $ 2,242 | $ 2,431 | $ 1,406 |
Selected Quarterly Financial Data (unaudited) - Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Sep. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 185,100 | $ 175,465 | $ 184,019 | $ 154,426 | $ 163,917 | $ 151,904 | $ 156,109 | $ 155,756 | $ 699,010 | $ 627,686 | $ 538,128 | |
Reimbursable expenses | 16,747 | 16,091 | 20,867 | 16,308 | 17,634 | 17,689 | 19,907 | 18,617 | 70,013 | 73,847 | 64,623 | |
Total revenues and reimbursable expenses | 201,847 | 191,556 | 204,886 | 170,734 | 181,551 | 169,593 | 176,016 | 174,373 | 769,023 | 701,533 | 602,751 | |
Gross profit | 75,956 | 76,160 | 77,793 | 50,479 | 58,413 | 50,862 | 62,704 | 66,832 | ||||
Operating income | 36,709 | 30,056 | 28,797 | 7,936 | 21,633 | 13,130 | 21,517 | 32,060 | 103,498 | 88,340 | 89,899 | |
Net income from continuing operations | 32,502 | 14,277 | 14,148 | 968 | 9,968 | 7,467 | 12,473 | 17,094 | 61,895 | 47,002 | 51,577 | |
Income (loss) from discontinued operations, net of tax | (13,159) | 5,097 | 4,685 | 534 | 2,825 | 4,752 | 7,440 | 17,032 | (2,843) | 32,049 | 14,856 | |
Net income | $ 19,343 | $ 19,374 | $ 18,833 | $ 1,502 | $ 12,793 | $ 12,219 | $ 19,913 | $ 34,126 | $ 59,052 | $ 79,051 | $ 66,433 | |
Net earnings per basic share: | ||||||||||||
Net income from continuing operations, per basic share (in USD per share) | $ 1.47 | $ 0.65 | $ 0.64 | $ 0.04 | $ 0.45 | $ 0.33 | $ 0.55 | $ 0.76 | $ 2.80 | $ 2.10 | $ 2.31 | |
Income (loss) from discontinued operations, net of tax, per basic share (In USD per share) | (0.59) | 0.23 | 0.21 | 0.03 | 0.13 | 0.21 | 0.33 | 0.75 | (0.13) | 1.42 | 0.67 | |
Net income, per basic share (in USD per share) | 0.88 | 0.88 | 0.85 | 0.07 | 0.58 | 0.54 | 0.88 | 1.51 | 2.67 | 3.52 | 2.98 | |
Net earnings per diluted share: | ||||||||||||
Net income from continuing operations, per diluted share (in USD per share) | 1.44 | 0.63 | 0.62 | 0.04 | 0.44 | 0.33 | 0.54 | 0.74 | 2.74 | 2.05 | 2.26 | |
Income (loss) from discontinued operations, net of tax | (0.58) | 0.23 | 0.21 | 0.03 | ||||||||
Net income, per diluted share (in USD per share) | $ 0.86 | $ 0.86 | $ 0.83 | $ 0.07 | $ 0.57 | $ 0.53 | $ 0.86 | $ 1.48 | $ 2.61 | $ 3.45 | $ 2.92 | |
Weighted average shares used in calculating earnings per share: | ||||||||||||
Basic (shares) | 22,093 | 22,107 | 22,220 | 22,126 | 22,010 | 22,488 | 22,645 | 22,588 | 22,136 | 22,431 | 22,322 | |
Diluted (shares) | 22,551 | 22,592 | 22,654 | 22,602 | 22,548 | 22,975 | 23,098 | 23,086 | 22,925 | 22,600 | 22,925 | 22,777 |
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