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 | |||
Emerging growth company o |
Page | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
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Item 16. | ||
ITEM 1. | BUSINESS. |
• | Enterprise Solutions and Analytics. Our Enterprise Solutions and Analytics professionals deliver technology and analytic solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client or stakeholder experience. Our expertise in full-service enterprise performance management (EPM), enterprise resource planning (ERP), business intelligence and analytics, customer relationship management (CRM), and data management services helps clients identify and execute on business and technology strategies to drive results and gain a competitive advantage. Huron is a Platinum level member of the Oracle PartnerNetwork (OPN), a Workday Services Partner, and a Gold level consulting partner with Salesforce.com. |
• | Business Advisory. Our Business Advisory professionals resolve complex business issues and enhance client enterprise value through a suite of services including capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory. 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 advisory services to assist clients in making informed decisions for transaction, tax or litigation purposes. Securities transactions are handled by our registered broker-dealer, Huron Transaction Advisory LLC, a member of FINRA. |
• | Strategy and Innovation. Our Strategy and Innovation professionals collaborate with clients across a range of industries to achieve repeatable business growth and innovation. We help organizations identify new growth opportunities, build new ventures and capabilities, and accelerate organizational change. |
• | Life Sciences. Our Life Sciences professionals provide strategic solutions to help pharmaceutical, medical device, and biotechnology companies deliver more value to patients, payers, and providers and comply with regulations. We advise clients in the areas of corporate and financial strategy, compliance and operations, reimbursement and access strategy, commercial contracting strategy, R&D and product strategy commercial segmentation, fair market value analysis, lifecycle management, litigation and investigations, government pricing and transparency reporting, auditing and monitoring, and overall business process improvement. |
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 engagements in the government sector, which are subject to federal contracting regulations; |
• | introduction of new services by us or our competitors; |
• | our competition and the pricing policies of our competitors; and |
• | current economic conditions. |
• | 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 | ||||||
2016 | |||||||
First Quarter | $ | 60.00 | $ | 46.00 | |||
Second Quarter | $ | 62.34 | $ | 54.14 | |||
Third Quarter | $ | 65.00 | $ | 57.23 | |||
Fourth Quarter | $ | 60.64 | $ | 41.20 | |||
2017 | |||||||
First Quarter | $ | 49.25 | $ | 39.15 | |||
Second Quarter | $ | 46.85 | $ | 40.50 | |||
Third Quarter | $ | 43.70 | $ | 29.53 | |||
Fourth Quarter | $ | 42.50 | $ | 32.40 |
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, 2017 – October 31, 2017 | 354 | $ | 35.85 | — | $ | 35,143,546 | ||||||||
November 1, 2017 – November 30, 2017 | — | $ | — | — | $ | 35,143,546 | ||||||||
December 1, 2017 – December 31, 2017 | 9,478 | $ | 40.45 | — | $ | 35,143,546 | ||||||||
Total | 9,832 | $ | 40.28 | — |
(1) | The number of shares repurchased for each period represents shares to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the Share Repurchase Program. |
(2) | As of the end of the period. |
ITEM 6. | SELECTED FINANCIAL DATA. |
Consolidated Statements of Operations (in thousands, except per share data): | Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Revenues and reimbursable expenses: | ||||||||||||||||||||
Revenues | $ | 732,570 | $ | 726,272 | $ | 699,010 | $ | 627,686 | $ | 538,128 | ||||||||||
Reimbursable expenses | 75,175 | 71,712 | 70,013 | 73,847 | 64,623 | |||||||||||||||
Total revenues and reimbursable expenses | 807,745 | 797,984 | 769,023 | 701,533 | 602,751 | |||||||||||||||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses) (1): | ||||||||||||||||||||
Direct costs | 454,806 | 437,556 | 401,915 | 384,277 | 323,398 | |||||||||||||||
Amortization of intangible assets and software development costs | 10,932 | 15,140 | 16,788 | 4,590 | 2,660 | |||||||||||||||
Reimbursable expenses | 75,436 | 71,749 | 69,932 | 73,855 | 64,665 | |||||||||||||||
Total direct costs and reimbursable expenses | 541,174 | 524,445 | 488,635 | 462,722 | 390,723 | |||||||||||||||
Operating expenses and other losses (gains), net: | ||||||||||||||||||||
Selling, general and administrative expenses | 175,364 | 160,204 | 157,902 | 132,799 | 116,976 | |||||||||||||||
Restructuring charges | 6,246 | 9,592 | 3,329 | 2,811 | 305 | |||||||||||||||
Litigation and other (gains) losses, net | 1,111 | (1,990 | ) | (9,476 | ) | (590 | ) | (5,875 | ) | |||||||||||
Depreciation and amortization (1) | 38,213 | 31,499 | 25,135 | 15,451 | 10,723 | |||||||||||||||
Goodwill impairment charges | 253,093 | — | — | — | — | |||||||||||||||
Total operating expenses and other losses (gains), net | 474,027 | 199,305 | 176,890 | 150,471 | 122,129 | |||||||||||||||
Operating income (loss) | (207,456 | ) | 74,234 | 103,498 | 88,340 | 89,899 | ||||||||||||||
Other income (expense), net: | ||||||||||||||||||||
Interest expense, net of interest income | (18,613 | ) | (16,274 | ) | (18,136 | ) | (8,679 | ) | (6,475 | ) | ||||||||||
Other income (expense), net | 3,565 | 1,197 | (1,797 | ) | 400 | 353 | ||||||||||||||
Total other expense, net | (15,048 | ) | (15,077 | ) | (19,933 | ) | (8,279 | ) | (6,122 | ) | ||||||||||
Income (loss) from continuing operations before taxes | (222,504 | ) | 59,157 | 83,565 | 80,061 | 83,777 | ||||||||||||||
Income tax expense (benefit) | (51,999 | ) | 19,677 | 21,670 | 33,059 | 32,200 | ||||||||||||||
Net income (loss) from continuing operations | (170,505 | ) | 39,480 | 61,895 | 47,002 | 51,577 | ||||||||||||||
Income (loss) from discontinued operations, net of tax | 388 | (1,863 | ) | (2,843 | ) | 32,049 | 14,856 | |||||||||||||
Net income (loss) | $ | (170,117 | ) | $ | 37,617 | $ | 59,052 | $ | 79,051 | $ | 66,433 |
Consolidated Statements of Operations (in thousands, except per share data): | Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net earnings (loss) per basic share: | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.87 | $ | 2.80 | $ | 2.10 | $ | 2.31 | |||||||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.09 | ) | (0.13 | ) | 1.42 | 0.67 | |||||||||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.78 | $ | 2.67 | $ | 3.52 | $ | 2.98 | |||||||||
Net earnings (loss) per diluted share: | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.84 | $ | 2.74 | $ | 2.05 | $ | 2.26 | |||||||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.08 | ) | (0.13 | ) | 1.40 | 0.66 | |||||||||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.76 | $ | 2.61 | $ | 3.45 | $ | 2.92 | |||||||||
Weighted average shares used in calculating net earnings (loss) per share: | ||||||||||||||||||||
Basic | 21,439 | 21,084 | 22,136 | 22,431 | 22,322 | |||||||||||||||
Diluted | 21,439 | 21,424 | 22,600 | 22,925 | 22,777 |
Consolidated Balance Sheet Data (in thousands): | As of December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Cash and cash equivalents | $ | 16,909 | $ | 17,027 | $ | 58,437 | $ | 256,872 | $ | 58,131 | ||||||||||
Working capital | $ | 51,828 | $ | 44,314 | $ | 96,966 | $ | 307,978 | $ | 98,394 | ||||||||||
Total assets | $ | 1,036,928 | $ | 1,153,215 | $ | 1,159,543 | $ | 1,148,475 | $ | 883,223 | ||||||||||
Long-term debt, net of current portion | $ | 342,507 | $ | 292,065 | $ | 307,376 | $ | 320,413 | $ | 141,421 | ||||||||||
Total stockholders’ equity (2) | $ | 503,316 | $ | 648,033 | $ | 652,325 | $ | 600,634 | $ | 530,264 |
(1) | Intangible asset amortization relating to customer contracts, certain client relationships, and software and amortization of software development costs are presented as a component of total direct costs. Depreciation and intangible assets amortization not classified as direct costs are presented as a component of operating expenses. |
(2) | 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, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Segment and Consolidated Operating Results (in thousands): | |||||||||||
Healthcare: | |||||||||||
Revenues | $ | 356,909 | $ | 424,912 | $ | 446,887 | |||||
Operating income | $ | 118,761 | $ | 147,903 | $ | 169,560 | |||||
Segment operating income as a percentage of segment revenues | 33.3 | % | 34.8 | % | 37.9 | % | |||||
Education: | |||||||||||
Revenues | $ | 167,908 | $ | 149,817 | $ | 134,009 | |||||
Operating income | $ | 40,318 | $ | 38,310 | $ | 32,246 | |||||
Segment operating income as a percentage of segment revenues | 24.0 | % | 25.6 | % | 24.1 | % | |||||
Business Advisory: | |||||||||||
Revenues | $ | 207,753 | $ | 151,543 | $ | 116,892 | |||||
Operating income | $ | 46,600 | $ | 29,382 | $ | 31,233 | |||||
Segment operating income as a percentage of segment revenues | 22.4 | % | 19.4 | % | 26.7 | % | |||||
All Other: | |||||||||||
Revenues | $ | — | $ | — | $ | 1,222 | |||||
Operating loss | $ | — | $ | — | $ | (1,718 | ) | ||||
Segment operating loss as a percentage of segment revenues | N/A | N/A | N/M | ||||||||
Total Company: | |||||||||||
Revenues | $ | 732,570 | $ | 726,272 | $ | 699,010 | |||||
Reimbursable expenses | 75,175 | 71,712 | 70,013 | ||||||||
Total revenues and reimbursable expenses | $ | 807,745 | $ | 797,984 | $ | 769,023 | |||||
Statements of Operations reconciliation: | |||||||||||
Segment operating income | $ | 205,679 | $ | 215,595 | $ | 231,321 | |||||
Items not allocated at the segment level: | |||||||||||
Other operating expenses | 120,718 | 111,852 | 112,164 | ||||||||
Litigation and other losses (gains), net | 1,111 | (1,990 | ) | (9,476 | ) | ||||||
Depreciation and amortization | 38,213 | 31,499 | 25,135 | ||||||||
Goodwill impairment charges (1) | 253,093 | — | — | ||||||||
Total operating income (loss) | (207,456 | ) | 74,234 | 103,498 | |||||||
Other expense, net | 15,048 | 15,077 | 19,933 | ||||||||
Income (loss) from continuing operations before taxes | (222,504 | ) | 59,157 | 83,565 | |||||||
Income tax expense (benefit) | (51,999 | ) | 19,677 | 21,670 | |||||||
Net income (loss) from continuing operations | $ | (170,505 | ) | $ | 39,480 | $ | 61,895 | ||||
Earnings (loss) per share from continuing operations | |||||||||||
Basic | $ | (7.95 | ) | $ | 1.87 | $ | 2.80 | ||||
Diluted | $ | (7.95 | ) | $ | 1.84 | $ | 2.74 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Other Operating Data (excluding All Other): | |||||||||||
Number of full-time billable consultants (at period end) (2): | |||||||||||
Healthcare | 778 | 888 | 1,037 | ||||||||
Education | 549 | 468 | 387 | ||||||||
Business Advisory | 809 | 547 | 397 | ||||||||
Total | 2,136 | 1,903 | 1,821 | ||||||||
Average number of full-time billable consultants (for the period) (2): | |||||||||||
Healthcare | 796 | 998 | 1,085 | ||||||||
Education | 509 | 437 | 351 | ||||||||
Business Advisory | 740 | 486 | 334 | ||||||||
Total | 2,045 | 1,921 | 1,770 | ||||||||
Full-time billable consultant utilization rate (3): | |||||||||||
Healthcare | 78.4 | % | 77.1 | % | 77.9 | % | |||||
Education | 72.8 | % | 70.6 | % | 74.6 | % | |||||
Business Advisory | 71.7 | % | 73.1 | % | 76.2 | % | |||||
Total | 74.5 | % | 74.6 | % | 76.9 | % | |||||
Full-time billable consultant average billing rate per hour (4): | |||||||||||
Healthcare | $ | 206 | $ | 210 | $ | 217 | |||||
Education | $ | 213 | $ | 219 | $ | 216 | |||||
Business Advisory (5) | $ | 193 | $ | 208 | $ | 245 | |||||
Total | $ | 203 | $ | 212 | $ | 222 | |||||
Revenue per full-time billable consultant (in thousands): | |||||||||||
Healthcare | $ | 295 | $ | 300 | $ | 313 | |||||
Education | $ | 291 | $ | 293 | $ | 317 | |||||
Business Advisory | $ | 268 | $ | 293 | $ | 335 | |||||
Total | $ | 284 | $ | 297 | $ | 318 | |||||
Average number of full-time equivalents (for the period) (6): | |||||||||||
Healthcare | 213 | 203 | 179 | ||||||||
Education | 35 | 38 | 39 | ||||||||
Business Advisory | 20 | 20 | 12 | ||||||||
Total | 268 | 261 | 230 | ||||||||
Revenue per full-time equivalent (in thousands): | |||||||||||
Healthcare | $ | 576 | $ | 614 | $ | 604 | |||||
Education | $ | 564 | $ | 572 | $ | 587 | |||||
Business Advisory | $ | 464 | $ | 453 | $ | 418 | |||||
Total | $ | 566 | $ | 596 | $ | 591 |
(1) | The non-cash goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance. |
(2) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. |
(3) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all of our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. |
(4) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
(5) | The Business Advisory segment includes our India Enterprise Solutions and Analytics practice, formerly known as Rittman Mead Consulting Private Limited, a business that we acquired in July 2015. The average billing rate per hour for this practice is lower than our overall average billing rate per hour for the Business Advisory segment. Absent the impact of our India Enterprise Solutions and Analytics practice, the average billing rate per hour for Business Advisory for the years ended December 31, 2017, 2016, and 2015 would have been $233, $235, and $267, respectively. |
(6) | Consists of cultural transformation consultants within our Studer Group solution, which include coaches and their support staff, consultants who work variable schedules as needed by our clients, and full-time employees who provide software support and maintenance services to our clients. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues | $ | 732,570 | $ | 726,272 | $ | 699,010 | |||||
Net income (loss) from continuing operations | $ | (170,505 | ) | $ | 39,480 | $ | 61,895 | ||||
Add back: | |||||||||||
Income tax expense (benefit) | (51,999 | ) | 19,677 | 21,670 | |||||||
Interest expense, net of interest income | 18,613 | 16,274 | 18,136 | ||||||||
Depreciation and amortization | 49,145 | 46,639 | 41,923 | ||||||||
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) | (154,746 | ) | 122,070 | 143,624 | |||||||
Add back: | |||||||||||
Restructuring charges | 6,246 | 9,592 | 3,329 | ||||||||
Litigation and other losses (gains), net | 1,111 | (1,990 | ) | (9,476 | ) | ||||||
Goodwill impairment charges | 253,093 | — | — | ||||||||
Other non-operating expense (income) | (696 | ) | — | — | |||||||
Foreign currency transaction losses (gains), net | (434 | ) | (11 | ) | 1,640 | ||||||
Adjusted EBITDA | $ | 104,574 | $ | 129,661 | $ | 139,117 | |||||
Adjusted EBITDA as a percentage of revenues | 14.3 | % | 17.9 | % | 19.9 | % |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income (loss) from continuing operations | $ | (170,505 | ) | $ | 39,480 | $ | 61,895 | ||||
Weighted average shares - diluted | 21,439 | 21,424 | 22,600 | ||||||||
Diluted earnings (loss) per share from continuing operations | $ | (7.95 | ) | $ | 1.84 | $ | 2.74 | ||||
Add back: | |||||||||||
Amortization of intangible assets | 35,027 | 33,108 | 28,696 | ||||||||
Restructuring charges | 6,246 | 9,592 | 3,329 | ||||||||
Litigation and other losses (gains), net | 1,111 | (1,990 | ) | (9,476 | ) | ||||||
Goodwill impairment charges | 253,093 | — | — | ||||||||
Non-cash interest on convertible notes | 7,851 | 7,488 | 7,141 | ||||||||
Other non-operating income, net | (696 | ) | — | — | |||||||
Tax effect | (91,557 | ) | (18,942 | ) | (11,698 | ) | |||||
Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017 | 8,762 | — | — | ||||||||
Tax benefit related to "check-the-box" election | (2,728 | ) | — | (12,336 | ) | ||||||
Total adjustments, net of tax | 217,109 | 29,256 | 5,656 | ||||||||
Adjusted net income from continuing operations | $ | 46,604 | $ | 68,736 | $ | 67,551 | |||||
Adjusted weighted average shares - diluted | 21,627 | 21,424 | 22,600 | ||||||||
Adjusted diluted earnings per share from continuing operations | $ | 2.15 | $ | 3.21 | $ | 2.99 |
Cash Flows (in thousands): | Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | ||||||||||
Net cash provided by operating activities | $ | 99,795 | $ | 129,243 | $ | 167,855 | ||||||
Net cash used in investing activities | (128,948 | ) | (86,636 | ) | (272,158 | ) | ||||||
Net cash provided by (used in) financing activities | 28,821 | (84,095 | ) | (93,543 | ) | |||||||
Effect of exchange rate changes on cash | 214 | 78 | (589 | ) | ||||||||
Net decrease in cash and cash equivalents | $ | (118 | ) | $ | (41,410 | ) | $ | (198,435 | ) |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
Convertible senior notes—principal and interest (1) | $ | 256,250 | $ | 3,125 | $ | 253,125 | $ | — | $ | — | |||||||||
Long-term bank borrowings—principal and interest (2) | 113,335 | 3,704 | 109,631 | — | — | ||||||||||||||
Promissory note—principal and interest (3) | 5,548 | 656 | 1,302 | 1,290 | 2,300 | ||||||||||||||
Operating lease obligations (4) | 99,960 | 14,739 | 25,710 | 21,707 | 37,804 | ||||||||||||||
Contingent consideration (5) | 22,828 | 8,515 | 12,513 | 1,800 | — | ||||||||||||||
Purchase obligations (6) | 12,533 | 10,442 | 2,091 | — | — | ||||||||||||||
Transition tax on accumulated foreign earnings (7) | 604 | 48 | 97 | 97 | 362 | ||||||||||||||
Deferred compensation (8) | 17,678 | ||||||||||||||||||
Uncertain tax positions (9) | 813 | ||||||||||||||||||
Total contractual obligations | $ | 529,549 | $ | 41,229 | $ | 404,469 | $ | 24,894 | $ | 40,466 |
(1) | 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. |
(2) | The interest payments on long-term bank borrowings are estimated based on the principal amount outstanding and the interest rate in effect as of December 31, 2017. 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. |
(3) | The interest payments on the promissory note are estimated based on the principal amount outstanding, scheduled principal payments, and the interest rate in effect as of December 31, 2017. Actual future interest payments may differ due to changes in the principal amount outstanding and the interest rate on that principal amount, as the interest rate varies based on the fluctuations in the one-month LIBOR rate. Refer to “Liquidity and Capital Resources” and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for more information on the promissory note. |
(4) | We lease our facilities under operating lease arrangements expiring on various dates through 2028, 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. |
(5) | In connection with certain business acquisitions, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreements. As of December 31, 2017, the estimated fair value of the contingent consideration liability was $22.8 million. The maximum amount that may be paid under contingent consideration liabilities existing as of December 31, 2017 is $56.2 million. |
(6) | Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding, and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include agreements that are cancelable without penalty. |
(7) | As a result of the 2017 Tax Reform, we are required to pay a one-time transition tax on our accumulated foreign earnings as of December 31, 2017, which were primarily generated by our operations in Canada. We have the option to pay this liability in installments over the next eight years as reflected in the table above, and the payments may be offset with certain foreign tax credits. |
(8) | Included in deferred compensation and other liabilities on our consolidated balance sheet as of December 31, 2017 is a $17.7 million obligation for deferred compensation. The specific payment dates for the deferred compensation are unknown; therefore, the related balances have not been reflected in the “Payments Due by Period” section of the table. This deferred compensation liability is fully funded by corresponding deferred compensation plan assets. 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. |
(9) | Our liabilities for uncertain tax positions are classified as non-current. We are unable to reasonably estimate the timing of future payments as it depends on examinations by taxing authorities; as such, the related balance has not been reflected in the “Payments Due by Period” section of the table. |
Discount rate increased by 100 bps | Long-term growth rate decreased by 100 bps | |||||||
Healthcare: | ||||||||
Decrease in fair value | $ | (46,700 | ) | $ | (32,600 | ) | ||
Percentage by which fair value exceeds carrying value | 31 | % | 33 | % | ||||
Education: | ||||||||
Decrease in fair value | $ | (16,900 | ) | $ | (12,600 | ) | ||
Percentage by which fair value exceeds carrying value | 106 | % | 110 | % | ||||
Business Advisory: | ||||||||
Decrease in fair value | $ | (2,200 | ) | $ | (1,400 | ) | ||
Percentage by which fair value exceeds carrying value | 107 | % | 110 | % | ||||
Strategy and Innovation: | ||||||||
Decrease in fair value | $ | (5,500 | ) | $ | (3,100 | ) | ||
Percentage by which fair value exceeds carrying value | 27 | % | 30 | % | ||||
Life Sciences | ||||||||
Decrease in fair value | $ | (2,100 | ) | $ | (1,400 | ) | ||
Percentage by which fair value exceeds carrying value | 4 | % | 7 | % |
Reporting Unit | Carrying Value of Goodwill | |||
Healthcare | $ | 428,729 | ||
Education | 102,829 | |||
Business Advisory | 16,094 | |||
Enterprise Solutions and Analytics | — | |||
Strategy and Innovation | 87,411 | |||
Life Sciences | 10,687 | |||
Total | $ | 645,750 |
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: | ||||||||||
2004 Omnibus Stock Plan (1) | 157,680 | $ | 26.70 | — | ||||||
2012 Omnibus Incentive Plan (2) | 36,617 | $ | 39.19 | 1,273,361 | ||||||
Stock Ownership Participation Program (3) | — | $ | — | 141,153 | ||||||
Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||
Total | 194,297 | $ | 29.06 | 1,414,514 |
(1) | Our 2004 Omnibus Stock Plan was approved by the existing shareholders prior to our initial public offering. Upon adoption of the 2012 Omnibus Incentive Plan, we terminated the 2004 Omnibus Stock Plan with respect to future awards and no further awards will be granted under this plan. |
(2) | Our 2012 Omnibus Incentive Plan was approved by our shareholders at our annual meeting held on May 1, 2012. At our annual meeting held on May 2, 2014, our shareholders approved an amendment to the 2012 Omnibus Incentive Plan to increase the number of shares reserved for issuance thereunder by 850,000 shares. At our annual meeting held on May 5, 2017, our shareholders approved an amended and restated 2012 Omnibus Incentive Plan which increased the number of shares authorized for issuance by 804,000 shares. |
(3) | Our Stock Ownership Participation Program was approved by our shareholders at our annual meeting held on May 1, 2015. |
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 | 8-K | 2.1 | 1/7/2016 | ||||
3.1 | 10-K | 12/31/2004 | 3.1 | 2/16/2005 | |||
3.2 | 8-K | 3.1 | 10/28/2015 | ||||
4.1 | S-1 (File No. 333- 115434) | 4.1 | 10/5/2004 | ||||
4.2 | 8-K | 4.1 | 9/16/2014 | ||||
10.1 | S-1 (File No. 333- 115434) | 10.1 | 10/5/2004 | ||||
10.2* | S-8 | 10.1 | 5/5/2010 | ||||
10.3* | 10-K | 12/31/2008 | 10.12 | 2/24/2009 | |||
10.4* | 8-K | 10.1 | 1/6/2017 | ||||
10.5* | 8-K | 10.2 | 1/6/2017 | ||||
10.6* | 8-K | 10.3 | 1/6/2017 |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
10.7* | 8-K | 10.4 | 1/6/2017 | ||||
10.8 | 10-K | 12/31/2012 | 10.17 | 2/21/2013 | |||
10.9 | 10-K | 12/31/2012 | 10.18 | 2/21/2013 | |||
10.10 | 10-K | 12/31/2012 | 10.19 | 2/21/2013 | |||
10.11 | 8-K | 10.1 | 1/4/2013 | ||||
10.12* | 10-K | 12/31/2012 | 10.20 | 2/21/2013 | |||
10.13 | 8-K | 10.1 | 9/5/2014 | ||||
10.14 | 8-K | 10.2 | 9/5/2014 | ||||
10.15 | 8-K | 10.3 | 9/5/2014 | ||||
10.16 | 8-K | 10.4 | 9/5/2014 | ||||
10.17 | 8-K | 10.5 | 9/5/2014 | ||||
10.18 | 8-K | 10.1 | 9/16/2014 | ||||
10.19 | 8-K | 10.2 | 9/16/2014 | ||||
10.20 | 8-K | 10.3 | 9/16/2014 |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
10.21 | 8-K | 10.4 | 9/16/2014 | ||||
10.22* | 10-K | 12/31/2014 | 10.31 | 2/24/2015 | |||
10.23* | 10-K | 12/31/2014 | 10.32 | 2/24/2015 | |||
10.24* | 10-K | 12/31/2014 | 10.33 | 2/24/2015 | |||
10.25* | 10-K | 12/31/2014 | 10.34 | 2/24/2015 | |||
10.26 | 8-K | 10.1 | 4/2/2015 | ||||
10.27 | 8-K | 10.2 | 4/2/2015 | ||||
10.28 | 8-K | 10.3 | 4/2/2015 | ||||
10.29* | DEF 14A | Appendix A | 3/20/2015 | ||||
10.30* | DEF 14A | Appendix A | 3/27/2017 | ||||
10.31 | 8-K | 10.1 | 3/6/2017 | ||||
10.32 | 10-Q | 9/30/2017 | 10.1 | 11/1/2017 | |||
21.1 | X | ||||||
23.1 | X |
Exhibit Number | Exhibit Description | Filed herewith | Furnished herewith | Incorporated by Reference | |||
Form | Period Ending | Exhibit | Filing Date | ||||
31.1 | X | ||||||
31.2 | X | ||||||
32.1 | X | ||||||
32.2 | 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. |
ITEM 16. | FORM 10-K SUMMARY |
Huron Consulting Group Inc. | ||||
(Registrant) |
Signature | Title | Date | ||
/s/ James H. Roth | President, Chief Executive Officer and Director | 2/28/2018 | ||
James H. Roth |
Signature | Title | Date | ||
/s/ JAMES H. ROTH | President, Chief Executive Officer and Director (Principal Executive Officer) | 2/28/2018 | ||
James H. Roth | ||||
/s/ JOHN F. MCCARTNEY | Non-Executive Chairman of the Board | 2/28/2018 | ||
John F. McCartney | ||||
/s/ GEORGE E. MASSARO | Vice Chairman of the Board | 2/28/2018 | ||
George E. Massaro | ||||
/s/ JOHN D. KELLY | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | 2/28/2018 | ||
John D. Kelly | ||||
/s/ JAMES D. EDWARDS | Director | 2/28/2018 | ||
James D. Edwards | ||||
/s/ H. EUGENE LOCKHART | Director | 2/28/2018 | ||
H. Eugene Lockhart | ||||
/s/ JOHN S. MOODY | Director | 2/28/2018 | ||
John S. Moody | ||||
/s/ HUGH E. SAWYER | Director | 2/28/2018 | ||
Hugh E. Sawyer | ||||
/s/ DEBRA ZUMWALT | Director | 2/28/2018 | ||
Debra Zumwalt |
December 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 16,909 | $ | 17,027 | |||
Receivables from clients, net | 101,778 | 94,246 | |||||
Unbilled services, net | 57,618 | 51,290 | |||||
Income tax receivable | 4,039 | 4,211 | |||||
Prepaid expenses and other current assets | 10,951 | 13,308 | |||||
Total current assets | 191,295 | 180,082 | |||||
Property and equipment, net | 45,541 | 32,434 | |||||
Deferred income taxes, net | 16,752 | — | |||||
Long-term investment | 39,904 | 34,675 | |||||
Other non-current assets | 25,375 | 24,814 | |||||
Intangible assets, net | 72,311 | 81,348 | |||||
Goodwill | 645,750 | 799,862 | |||||
Total assets | $ | 1,036,928 | $ | 1,153,215 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,194 | $ | 7,273 | |||
Accrued expenses and other current liabilities | 20,144 | 19,788 | |||||
Accrued payroll and related benefits | 73,698 | 82,669 | |||||
Accrued contingent consideration for business acquisitions | 8,515 | 1,985 | |||||
Deferred revenues | 27,916 | 24,053 | |||||
Total current liabilities | 139,467 | 135,768 | |||||
Non-current liabilities: | |||||||
Deferred compensation and other liabilities | 20,895 | 24,171 | |||||
Accrued contingent consideration for business acquisitions, net of current portion | 14,313 | 6,842 | |||||
Long-term debt, net of current portion | 342,507 | 292,065 | |||||
Deferred lease incentives | 15,333 | 10,703 | |||||
Deferred income taxes, net | 1,097 | 35,633 | |||||
Total non-current liabilities | 394,145 | 369,414 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 24,560,468 and 24,126,118 shares issued at December 31, 2017 and December 31, 2016, respectively | 241 | 235 | |||||
Treasury stock, at cost, 2,443,577 and 2,408,343 shares at December 31, 2017 and December 31, 2016, respectively | (121,994 | ) | (113,195 | ) | |||
Additional paid-in capital | 434,256 | 405,895 | |||||
Retained earnings | 180,443 | 351,483 | |||||
Accumulated other comprehensive income | 10,370 | 3,615 | |||||
Total stockholders’ equity | 503,316 | 648,033 | |||||
Total liabilities and stockholders’ equity | $ | 1,036,928 | $ | 1,153,215 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues and reimbursable expenses: | |||||||||||
Revenues | $ | 732,570 | $ | 726,272 | $ | 699,010 | |||||
Reimbursable expenses | 75,175 | 71,712 | 70,013 | ||||||||
Total revenues and reimbursable expenses | 807,745 | 797,984 | 769,023 | ||||||||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | |||||||||||
Direct costs | 454,806 | 437,556 | 401,915 | ||||||||
Amortization of intangible assets and software development costs | 10,932 | 15,140 | 16,788 | ||||||||
Reimbursable expenses | 75,436 | 71,749 | 69,932 | ||||||||
Total direct costs and reimbursable expenses | 541,174 | 524,445 | 488,635 | ||||||||
Operating expenses and other losses (gains), net: | |||||||||||
Selling, general and administrative expenses | 175,364 | 160,204 | 157,902 | ||||||||
Restructuring charges | 6,246 | 9,592 | 3,329 | ||||||||
Litigation and other losses (gains), net | 1,111 | (1,990 | ) | (9,476 | ) | ||||||
Depreciation and amortization | 38,213 | 31,499 | 25,135 | ||||||||
Goodwill impairment charges | 253,093 | — | — | ||||||||
Total operating expenses and other losses (gains), net | 474,027 | 199,305 | 176,890 | ||||||||
Operating income (loss) | (207,456 | ) | 74,234 | 103,498 | |||||||
Other income (expense), net: | |||||||||||
Interest expense, net of interest income | (18,613 | ) | (16,274 | ) | (18,136 | ) | |||||
Other income (expense), net | 3,565 | 1,197 | (1,797 | ) | |||||||
Total other expense, net | (15,048 | ) | (15,077 | ) | (19,933 | ) | |||||
Income (loss) from continuing operations before taxes | (222,504 | ) | 59,157 | 83,565 | |||||||
Income tax expense (benefit) | (51,999 | ) | 19,677 | 21,670 | |||||||
Net income (loss) from continuing operations | (170,505 | ) | 39,480 | 61,895 | |||||||
Income (loss) from discontinued operations, net of tax | 388 | (1,863 | ) | (2,843 | ) | ||||||
Net income (loss) | $ | (170,117 | ) | $ | 37,617 | $ | 59,052 | ||||
Net earnings (loss) per basic share: | |||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.87 | $ | 2.80 | ||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.09 | ) | (0.13 | ) | ||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.78 | $ | 2.67 | ||||
Net earnings (loss) per diluted share: | |||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.84 | $ | 2.74 | ||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.08 | ) | (0.13 | ) | ||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.76 | $ | 2.61 | ||||
Weighted average shares used in calculating earnings per share: | |||||||||||
Basic | 21,439 | 21,084 | 22,136 | ||||||||
Diluted | 21,439 | 21,424 | 22,600 | ||||||||
Comprehensive income (loss): | |||||||||||
Net income (loss) | $ | (170,117 | ) | $ | 37,617 | $ | 59,052 | ||||
Foreign currency translation adjustments, net of tax | 1,602 | 64 | 1,817 | ||||||||
Unrealized gain (loss) on investment, net of tax | 4,724 | (97 | ) | 4,435 | |||||||
Unrealized gain (loss) on cash flow hedging instruments, net of tax | 429 | 63 | (12 | ) | |||||||
Other comprehensive income | 6,755 | 30 | 6,240 | ||||||||
Comprehensive income (loss) | $ | (163,362 | ) | $ | 37,647 | $ | 65,292 |
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, 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 | |||||||||||||
Comprehensive income | 37,617 | 30 | 37,647 | ||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||
Restricted stock awards, net of cancellations | 390,348 | 4 | (70,419 | ) | (4,508 | ) | 4,504 | — | |||||||||||||||||||||
Exercise of stock options | 4,706 | — | 123 | 123 | |||||||||||||||||||||||||
Share-based compensation | 17,929 | 17,929 | |||||||||||||||||||||||||||
Shares redeemed for employee tax withholdings | (88,414 | ) | (4,953 | ) | (4,953 | ) | |||||||||||||||||||||||
Income tax benefit on share-based compensation | 227 | 227 | |||||||||||||||||||||||||||
Share repurchases | (982,192 | ) | (10 | ) | (55,255 | ) | (55,265 | ) | |||||||||||||||||||||
Balance at December 31, 2016 | 23,478,016 | $ | 235 | (2,420,913 | ) | $ | (113,195 | ) | $ | 405,895 | $ | 351,483 | $ | 3,615 | $ | 648,033 | |||||||||||||
Comprehensive income | (170,117 | ) | 6,755 | (163,362 | ) | ||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||
Restricted stock awards, net of cancellations | 399,248 | 4 | (58,211 | ) | (3,953 | ) | 3,949 | — | |||||||||||||||||||||
Business acquisition | 221,558 | 2 | 9,558 | 9,560 | |||||||||||||||||||||||||
Share-based compensation | 14,419 | 14,419 | |||||||||||||||||||||||||||
Shares redeemed for employee tax withholdings | (112,011 | ) | (4,846 | ) | (4,846 | ) | |||||||||||||||||||||||
Cumulative-effect adjustment from adoption of ASU 2016-09 | 435 | (435 | ) | — | |||||||||||||||||||||||||
Cumulative-effect adjustment from adoption of ASU 2018-02 | (488 | ) | (488 | ) | |||||||||||||||||||||||||
Balance at December 31, 2017 | 24,098,822 | $ | 241 | (2,591,135 | ) | $ | (121,994 | ) | $ | 434,256 | $ | 180,443 | $ | 10,370 | $ | 503,316 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (170,117 | ) | $ | 37,617 | $ | 59,052 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 50,089 | 46,816 | 58,053 | ||||||||
Share-based compensation | 14,838 | 16,577 | 21,487 | ||||||||
Amortization of debt discount and issuance costs | 10,203 | 9,609 | 9,329 | ||||||||
Goodwill impairment charge | 253,093 | — | — | ||||||||
Allowances for doubtful accounts and unbilled services | 3,217 | 4,250 | 1,025 | ||||||||
Deferred income taxes | (53,753 | ) | 1,189 | 6,353 | |||||||
(Gain) loss on sale of businesses | (931 | ) | — | 2,303 | |||||||
Change in fair value of contingent consideration liabilities | 1,111 | (1,990 | ) | (1,126 | ) | ||||||
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||||||||||
(Increase) decrease in receivables from clients | 1,650 | 1,440 | (2,836 | ) | |||||||
(Increase) decrease in unbilled services | (4,332 | ) | 2,443 | 31,696 | |||||||
(Increase) decrease in current income tax receivable / payable, net | 210 | (4,410 | ) | 8,818 | |||||||
(Increase) decrease in other assets | (366 | ) | 11,904 | (14,742 | ) | ||||||
Increase (decrease) in accounts payable and accrued liabilities | 3,732 | (3,144 | ) | 8,805 | |||||||
Increase (decrease) in accrued payroll and related benefits | (10,966 | ) | 3,044 | (25,221 | ) | ||||||
Increase (decrease) in deferred revenues | 2,117 | 3,898 | 4,859 | ||||||||
Net cash provided by operating activities | 99,795 | 129,243 | 167,855 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment, net | (24,402 | ) | (13,936 | ) | (18,571 | ) | |||||
Investment in life insurance policies | (1,826 | ) | (2,035 | ) | (5,804 | ) | |||||
Distributions from life insurance policies | 2,889 | — | — | ||||||||
Purchases of businesses, net of cash acquired | (106,915 | ) | (69,133 | ) | (339,966 | ) | |||||
Purchases of convertible debt investment | — | — | (15,438 | ) | |||||||
Capitalization of internally developed software | (1,370 | ) | (1,086 | ) | (866 | ) | |||||
Proceeds from note receivable | 1,177 | — | — | ||||||||
Proceeds from sale of businesses, net of cash sold | 1,499 | (446 | ) | 108,487 | |||||||
Net cash used in investing activities | (128,948 | ) | (86,636 | ) | (272,158 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercises of stock options | — | 123 | — | ||||||||
Shares redeemed for employee tax withholdings | (4,846 | ) | (4,953 | ) | (7,154 | ) | |||||
Share repurchases | — | (55,265 | ) | (34,591 | ) | ||||||
Proceeds from borrowings under credit facility | 277,500 | 200,000 | 314,000 | ||||||||
Repayments of debt | (240,745 | ) | (224,000 | ) | (365,750 | ) | |||||
Payments for debt issuance costs | (408 | ) | — | — | |||||||
Payments for capital lease obligations | — | — | (48 | ) | |||||||
Deferred acquisition payments | (2,680 | ) | — | — | |||||||
Net cash provided by (used in) financing activities | 28,821 | (84,095 | ) | (93,543 | ) | ||||||
Effect of exchange rate changes on cash | 214 | 78 | (589 | ) | |||||||
Net decrease in cash and cash equivalents | (118 | ) | (41,410 | ) | (198,435 | ) | |||||
Cash and cash equivalents at beginning of the period | 17,027 | 58,437 | 256,872 | ||||||||
Cash and cash equivalents at end of the period | $ | 16,909 | $ | 17,027 | $ | 58,437 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Non-cash investing and financing activities: | |||||||||||
Property and equipment expenditures included in accounts payable and accrued expenses | $ | 1,567 | $ | 4,461 | $ | 2,089 | |||||
Promissory note assumed for purchase of property and equipment | $ | 5,113 | $ | — | $ | — | |||||
Contingent consideration related to business acquisitions | $ | 15,489 | $ | 8,754 | $ | 2,963 | |||||
Common stock issued related to business acquisitions | $ | 9,560 | $ | — | $ | 2,204 | |||||
Cash paid during the year for: | |||||||||||
Interest | $ | 9,068 | $ | 6,470 | $ | 9,274 | |||||
Income taxes | $ | 5,399 | $ | 24,584 | $ | 10,955 |
Year Ended December 31, 2015 | |||
Revenues and reimbursable expenses: | |||
Revenues | $ | 139,430 | |
Reimbursable expenses | 3,148 | ||
Total revenues and reimbursable expenses | 142,578 | ||
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | |||
Direct costs | 95,247 | ||
Amortization of intangible assets and software development costs | 233 | ||
Reimbursable expenses | 3,153 | ||
Total direct costs and reimbursable expenses | 98,633 | ||
Operating expenses and other operating gain: | |||
Selling, general and administrative expenses | 20,640 | ||
Restructuring charges (1) | 13,341 | ||
Other gain | (900 | ) | |
Depreciation and amortization | 9,605 | ||
Total operating expenses and other operating gain | 42,686 | ||
Operating income | 1,259 | ||
Other expense, net | (13 | ) | |
Income from discontinued operations before taxes | 1,246 | ||
Loss on disposal | (2,303 | ) | |
Total loss from discontinued operations before taxes | (1,057 | ) | |
Income tax benefit (2) | 1,786 | ||
Net loss from discontinued operations | $ | (2,843 | ) |
(2) | Refer to Note 16 "Income Taxes" for additional detail on the income tax benefit recognized for discontinued operations. |
Year Ended December 31, 2015 | |||
Depreciation and amortization | $ | 15,974 | |
Share-based compensation | $ | 2,215 | |
Purchases of property and equipment | $ | 6,234 | |
Significant non-cash investing items of discontinued operations: | |||
Contingent consideration related to a business acquisition | $ | 900 |
Fair value of consideration transferred | |||
Cash | $ | 90,725 | |
Common stock | 9,560 | ||
Contingent consideration liability | 12,050 | ||
Net working capital adjustment | 1,272 | ||
Total consideration transferred | $ | 113,607 |
March 1, 2017 | |||
Assets acquired: | |||
Accounts receivable | $ | 7,752 | |
Unbilled services | 1,881 | ||
Prepaid expenses and other current assets | 468 | ||
Property and equipment | 419 | ||
Intangible assets | 18,015 | ||
Liabilities assumed: | |||
Accounts payable | 531 | ||
Accrued expenses and other current liabilities | 894 | ||
Accrued payroll and related benefits | 883 | ||
Deferred revenues | 30 | ||
Total identifiable net assets | 26,197 | ||
Goodwill | 87,410 | ||
Total purchase price | $ | 113,607 |
Fair Value | Useful Life in Years | ||||
Customer relationships | $ | 9,500 | 6 | ||
Trade name | 6,000 | 6 | |||
Customer contracts | 1,000 | 1 | |||
Non-compete agreements | 1,300 | 5 | |||
Favorable lease contract | 215 | 1 | |||
Total intangible assets subject to amortization | $ | 18,015 |
Year Ended December 31, | |||||||
2017 | 2016 | ||||||
Revenues | $ | 741,695 | $ | 769,114 | |||
Net income (loss) from continuing operations | $ | (167,346 | ) | $ | 42,760 | ||
Net income (loss) from continuing operations per share - basic | $ | (7.79 | ) | $ | 2.01 | ||
Net income (loss) from continuing operations per share - diluted | $ | (7.79 | ) | $ | 1.98 |
Fair value of consideration transferred | |||
Cash | $ | 323,237 | |
Common stock | 2,204 | ||
Net working capital adjustment | (255 | ) | |
Total consideration transferred | $ | 325,186 |
February 12, 2015 | |||
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 |
Year Ended December 31, 2015 | ||||
Revenues | $ | 709,813 | ||
Net income from continuing operations | $ | 63,600 | ||
Net income from continuing operations per share - basic | $ | 2.87 | ||
Net income from continuing operations per share - diluted | $ | 2.81 |
Healthcare | Education | Business Advisory | Total | |||||||||||||
Balance as of December 31, 2015: | ||||||||||||||||
Goodwill | $ | 610,264 | $ | 102,906 | $ | 181,213 | $ | 894,383 | ||||||||
Accumulated impairment losses | — | — | (142,983 | ) | (142,983 | ) | ||||||||||
Goodwill, net as of December 31, 2015 | $ | 610,264 | $ | 102,906 | $ | 38,230 | $ | 751,400 | ||||||||
Goodwill recorded in connection with business combinations (1) | 26,538 | — | 21,824 | 48,362 | ||||||||||||
Foreign currency translation | — | — | 100 | 100 | ||||||||||||
Balance as of December 31, 2016: | ||||||||||||||||
Goodwill | 636,802 | 102,906 | 203,137 | 942,845 | ||||||||||||
Accumulated impairment losses | — | — | (142,983 | ) | (142,983 | ) | ||||||||||
Goodwill, net as of December 31, 2016 | $ | 636,802 | $ | 102,906 | $ | 60,154 | $ | 799,862 | ||||||||
Goodwill recorded in connection with business combinations (1) | 8 | 10,252 | 88,183 | 98,443 | ||||||||||||
Goodwill impairment charge | (208,081 | ) | — | (45,012 | ) | (253,093 | ) | |||||||||
Goodwill reallocation (2) | — | (10,794 | ) | 10,794 | — | |||||||||||
Goodwill allocated to disposal of business (3) | — | — | (568 | ) | (568 | ) | ||||||||||
Foreign currency translation | — | 465 | 641 | 1,106 | ||||||||||||
Balance as of December 31, 2017: | ||||||||||||||||
Goodwill | 636,810 | 102,829 | 302,187 | 1,041,826 | ||||||||||||
Accumulated impairment losses | (208,081 | ) | — | (187,995 | ) | (396,076 | ) | |||||||||
Goodwill, net as of December 31, 2017: | $ | 428,729 | $ | 102,829 | $ | 114,192 | $ | 645,750 |
(1) | Refer to Note 4 "Acquisitions" for additional information on the goodwill recorded in connection with business combinations. |
(2) | In the second quarter of 2017, we reorganized our internal financial reporting structure, which management uses to assess performance and allocate resources, by moving our Life Sciences practice from the Education and Life Sciences segment to the Business Advisory segment. The remaining Education and Life Sciences segment is now referred to as the Education segment. The Life Sciences practice is a separate reporting unit for purposes of goodwill impairment testing. See Note 18 "Segment Information" for additional information on our reportable segments. |
(3) | On June 16, 2017, we sold our Life Sciences Compliance and Operations practice ("Life Sciences C&O") to a third-party, and allocated a portion of goodwill within the Life Sciences reporting unit to the disposed business based on the relative fair values of Life Sciences C&O and the remaining reporting unit. The allocated goodwill of $0.6 million was written off and included in the gain on sale of Life Sciences C&O. The sale of Life Sciences C&O did not meet the criteria for reporting separately as discontinued operations. In connection with the sale, we recorded a $0.9 million gain which is included in other income, net in our consolidated statements of operations. |
As of December 31, | |||||||||||||||||
2017 | 2016 | ||||||||||||||||
Useful Life in Years | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Customer relationships | 4 to 13 | $ | 106,195 | $ | 51,588 | $ | 89,279 | $ | 34,827 | ||||||||
Trade names | 2 to 6 | 29,016 | 18,915 | 22,930 | 11,652 | ||||||||||||
Customer contracts | 1 to 4 | 25,154 | 24,751 | 26,497 | 21,295 | ||||||||||||
Technology and software | 3 to 5 | 9,340 | 5,098 | 8,970 | 2,667 | ||||||||||||
Non-competition agreements | 3 to 5 | 5,163 | 2,637 | 3,685 | 1,697 | ||||||||||||
Publishing content | 3 | 3,300 | 3,163 | 3,300 | 2,062 | ||||||||||||
Favorable lease contract | 3 | 720 | 425 | 720 | 203 | ||||||||||||
In-process technology | Indefinite | — | — | 370 | — | ||||||||||||
Total | $ | 178,888 | $ | 106,577 | $ | 155,751 | $ | 74,403 |
Year Ending December 31, | Estimated Amortization Expense | |||
2018 | $ | 23,936 | ||
2019 | $ | 17,279 | ||
2020 | $ | 12,116 | ||
2021 | $ | 8,070 | ||
2022 | $ | 6,092 |
As of December 31, | |||||||
2017 | 2016 | ||||||
Computers, related equipment, and software | $ | 46,216 | $ | 48,607 | |||
Leasehold improvements | 45,244 | 38,502 | |||||
Furniture and fixtures | 16,434 | 12,545 | |||||
Aircraft | 7,541 | — | |||||
Assets under construction | 250 | 294 | |||||
Property and equipment | 115,685 | 99,948 | |||||
Accumulated depreciation and amortization | (70,144 | ) | (67,514 | ) | |||
Property and equipment, net | $ | 45,541 | $ | 32,434 |
As of December 31, | |||||||
2017 | 2016 | ||||||
1.25% convertible senior notes due 2019 | $ | 233,140 | $ | 224,065 | |||
Senior secured credit facility | 105,000 | 68,000 | |||||
Promissory note due 2024 | 4,868 | — | |||||
Total long-term debt | $ | 343,008 | $ | 292,065 | |||
Current maturities of debt (1) | (501 | ) | — | ||||
Long-term debt, net of current portion | $ | 342,507 | $ | 292,065 |
(1) | The current maturities of debt are included as a component of accrued expenses and other current liabilities on our consolidated balance sheets. |
Principal Payments of Long-Term Debt | |||
2018 | $ | 501 | |
2019 | $ | 250,515 | |
2020 | $ | 105,529 | |
2021 | $ | 544 | |
2022 | $ | 559 | |
Thereafter | $ | 2,221 |
• | 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. |
As of December 31, | |||||||
2017 | 2016 | ||||||
Liability component: | |||||||
Proceeds | $ | 250,000 | $ | 250,000 | |||
Less: debt discount, net of amortization | (14,668 | ) | (22,520 | ) | |||
Less: debt issuance costs, net of amortization | (2,192 | ) | (3,415 | ) | |||
Net carrying amount | $ | 233,140 | $ | 224,065 | |||
Equity component (1) | $ | 39,287 | $ | 39,287 |
(1) | Included in additional paid-in capital on the consolidated balance sheet. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Contractual interest coupon | $ | 3,125 | $ | 3,125 | $ | 3,125 | |||||
Amortization of debt discount | 7,851 | 7,488 | 7,141 | ||||||||
Amortization of debt issuance costs | 1,224 | 1,201 | 1,180 | ||||||||
Total interest expense | $ | 12,200 | $ | 11,814 | $ | 11,446 |
• | Convertible Note Hedge Transactions. In connection with the issuance of the Convertible Notes, the Company entered into 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 on 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 on the consolidated balance sheets. The warrants are separate transactions and are not part of the terms of the Convertible Notes or the convertible note hedge transactions. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income (loss) from continuing operations | $ | (170,505 | ) | $ | 39,480 | $ | 61,895 | ||||
Income (loss) from discontinued operations, net of tax | 388 | (1,863 | ) | (2,843 | ) | ||||||
Net income (loss) | $ | (170,117 | ) | $ | 37,617 | $ | 59,052 | ||||
Weighted average common shares outstanding—basic | 21,439 | 21,084 | 22,136 | ||||||||
Weighted average common stock equivalents | — | 340 | 464 | ||||||||
Weighted average common shares outstanding—diluted | 21,439 | 21,424 | 22,600 | ||||||||
Net earnings (loss) per basic share: | |||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.87 | $ | 2.80 | ||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.09 | ) | (0.13 | ) | ||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.78 | $ | 2.67 | ||||
Net earnings (loss) per diluted share: | |||||||||||
Net income (loss) from continuing operations | $ | (7.95 | ) | $ | 1.84 | $ | 2.74 | ||||
Income (loss) from discontinued operations, net of tax | 0.02 | (0.08 | ) | (0.13 | ) | ||||||
Net income (loss) | $ | (7.93 | ) | $ | 1.76 | $ | 2.61 |
As of December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Unvested restricted stock awards | 636 | 2 | 21 | |||||
Outstanding common stock options | 194 | — | — | |||||
Convertible senior notes | 3,129 | 3,129 | 3,129 | |||||
Warrants related to the issuance of convertible senior notes | 3,129 | 3,129 | 3,129 | |||||
Total anti-dilutive securities | 7,088 | 6,260 | 6,279 |
Employee Costs | Office Space Reductions | Other | Total | ||||||||||||
Balance as of December 31, 2015 | $ | 2,323 | $ | 6,379 | $ | — | $ | 8,702 | |||||||
Additions (1) | 9,082 | 57 | 585 | 9,724 | |||||||||||
Payments | (5,906 | ) | (2,424 | ) | (482 | ) | (8,812 | ) | |||||||
Adjustments (1) | (317 | ) | 1,765 | 245 | 1,693 | ||||||||||
Non-cash items | — | (4 | ) | (324 | ) | (328 | ) | ||||||||
Balance as of December 31, 2016 | 5,182 | 5,773 | 24 | 10,979 | |||||||||||
Additions (1) | 3,859 | 2,426 | 110 | 6,395 | |||||||||||
Payments | (7,611 | ) | (2,860 | ) | 5 | (10,466 | ) | ||||||||
Adjustments (1) | (117 | ) | (973 | ) | (78 | ) | (1,168 | ) | |||||||
Non-cash items | (46 | ) | (119 | ) | (61 | ) | (226 | ) | |||||||
Balance as of December 31, 2017 | $ | 1,267 | $ | 4,247 | $ | — | $ | 5,514 |
(1) | Additions and adjustments for the years ended December 31, 2017 and 2016 include a gain of $1.0 million and a charge of $2.0 million, respectively, related to updated lease assumptions for vacated offices spaces directly related to discontinued operations. Refer to Note 3 "Discontinued Operations" for additional information on our discontinued operations. |
Fair Value (Derivative Asset and Liability) As of December 31, | |||||||
Balance Sheet Location | 2017 | 2016 | |||||
Other non-current assets | $ | 581 | $ | — | |||
Accrued expenses | $ | 48 | $ | 54 |
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, 2017 | |||||||||||||||
Assets: | |||||||||||||||
Interest rate swaps | $ | — | $ | 533 | $ | — | $ | 533 | |||||||
Promissory note | — | — | 1,078 | 1,078 | |||||||||||
Convertible debt investment | — | — | 39,904 | 39,904 | |||||||||||
Deferred compensation assets | — | 17,786 | — | 17,786 | |||||||||||
Total assets | $ | — | $ | 18,319 | $ | 40,982 | $ | 59,301 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration for business acquisitions | $ | — | $ | — | $ | 22,828 | $ | 22,828 | |||||||
Total liabilities | $ | — | $ | — | $ | 22,828 | $ | 22,828 | |||||||
December 31, 2016 | |||||||||||||||
Assets: | |||||||||||||||
Promissory note | $ | — | $ | — | $ | 2,325 | $ | 2,325 | |||||||
Convertible debt investment | — | — | 34,675 | 34,675 | |||||||||||
Deferred compensation assets | — | 16,408 | — | 16,408 | |||||||||||
Total assets | $ | — | $ | 16,408 | $ | 37,000 | $ | 53,408 | |||||||
Liabilities: | |||||||||||||||
Interest rate swaps | $ | — | $ | 54 | $ | — | $ | 54 | |||||||
Contingent consideration for business acquisitions | — | — | 8,827 | 8,827 | |||||||||||
Total liabilities | $ | — | $ | 54 | $ | 8,827 | $ | 8,881 |
Promissory Note | ||||
Balance as of December 31, 2015 | $ | 2,309 | ||
Interest payments received | (191 | ) | ||
Change in fair value of promissory note | 207 | |||
Balance as of December 31, 2016 | 2,325 | |||
Interest payments received | (185 | ) | ||
Principal payments received | (1,177 | ) | ||
Change in fair value of promissory note | 115 | |||
Balance as of December 31, 2017 | $ | 1,078 |
Convertible Debt Investment | ||||
Balance as of December 31, 2015 | $ | 34,831 | ||
Change in fair value of convertible debt investment | (156 | ) | ||
Balance as of December 31, 2016 | 34,675 | |||
Change in fair value of convertible debt investment | 5,229 | |||
Balance as of December 31, 2017 | $ | 39,904 |
Contingent Consideration for Business Acquisitions | ||||
Balance as of December 31, 2015 | $ | 2,063 | ||
Acquisitions | 8,754 | |||
Remeasurement of contingent consideration for business acquisitions | (1,990 | ) | ||
Balance as of December 31, 2016 | 8,827 | |||
Acquisitions | 15,489 | |||
Payments | (2,938 | ) | ||
Remeasurement of contingent consideration for business acquisitions | 1,111 | |||
Unrealized loss due to foreign currency translation | 339 | |||
Balance as of December 31, 2017 | $ | 22,828 |
December 31, 2017 | December 31, 2016 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
1.25% convertible senior notes due 2019 | $ | 233,140 | $ | 232,578 | $ | 224,065 | $ | 245,018 |
Foreign Currency Translation | Available-for- Sale Investments | Cash Flow Hedges (1) | Total | ||||||||||||
Balance as of December 31, 2014 | $ | (2,334 | ) | $ | (250 | ) | $ | (71 | ) | $ | (2,655 | ) | |||
Foreign currency translation adjustment, net of tax of $0 | (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 | |||||||||
Foreign currency translation adjustment, net of tax of $0 | 64 | — | — | 64 | |||||||||||
Unrealized loss on investments, net of tax of $59 | — | (97 | ) | — | (97 | ) | |||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||
Change in fair value, net of tax of $122 | — | — | (179 | ) | (179 | ) | |||||||||
Reclassification adjustment into earnings, net of tax of $(161) | — | — | 242 | 242 | |||||||||||
Balance as of December 31, 2016 | (453 | ) | 4,088 | (20 | ) | 3,615 | |||||||||
Foreign currency translation adjustment, net of tax of $0 | 1,602 | — | — | 1,602 | |||||||||||
Unrealized gain on investments: | |||||||||||||||
Change in fair value, net of tax of $(998) | — | 4,231 | — | 4,231 | |||||||||||
Reclassification adjustment into retained earnings (3) | — | 493 | — | 493 | |||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||
Change in fair value, net of tax of $(106) | — | — | 366 | 366 | |||||||||||
Reclassification adjustment into earnings, net of tax of $(46) | — | — | 69 | 69 | |||||||||||
Reclassification adjustment into retained earnings (3) | — | — | (6 | ) | (6 | ) | |||||||||
Balance as of December 31, 2017 | $ | 1,149 | $ | 8,812 | $ | 409 | $ | 10,370 |
(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. |
(3) | Upon adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, we reclassified $0.5 million of stranded tax effects, which resulted from the enactment of the 2017 Tax Reform, from accumulated other comprehensive income to retained earnings. Refer to Note 2 "Summary of Significant Accounting Policies" for additional information on the adoption of ASU 2018-02. |
Number of Shares | Weighted Average Grant Date Fair Value (in dollars) | |||||||||||
2012 Omnibus Incentive Plan | Stock Ownership Participation Program | Total | ||||||||||
Nonvested restricted stock at December 31, 2016 | 610 | 12 | 622 | $ | 59.77 | |||||||
Granted | 270 | 14 | 284 | $ | 42.11 | |||||||
Vested | (247 | ) | (9 | ) | (256 | ) | $ | 57.80 | ||||
Forfeited | (72 | ) | (4 | ) | (76 | ) | $ | 59.18 | ||||
Nonvested restricted stock at December 31, 2017 | 561 | 13 | 574 | $ | 51.97 |
Number of Shares | Weighted Average Grant Date Fair Value (in dollars) | |||||
Nonvested performance-based stock at December 31, 2016 | 239 | $ | 58.47 | |||
Granted (1) | 328 | $ | 42.75 | |||
Vested | (85 | ) | $ | 61.66 | ||
Forfeited (2) | (129 | ) | $ | 54.85 | ||
Nonvested performance-based stock at December 31, 2017 (3) | 353 | $ | 44.45 |
(1) | Shares granted in 2017 are presented at the stated target, which represents the base number of shares that could be earned. Actual shares earned may be below or, for certain grants, above the target based on the achievement of specific financial goals. |
(2) | Forfeited shares include shares forfeited as a result of not meeting the performance criteria of the award as well as shares forfeited upon termination. |
(3) | Of the 353,000 nonvested performance-based shares outstanding as of December 31, 2017, approximately 316,000 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 2017 financial results, approximately 235,000 of the 316,000 unearned shares will be forfeited in the first quarter of 2018. |
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, 2016 | 194 | $ | 29.06 | 4.3 | $ | 4.2 | ||||||
Granted | — | |||||||||||
Exercised | — | |||||||||||
Forfeited or expired | — | |||||||||||
Outstanding at December 31, 2017 (1) | 194 | $ | 29.06 | 3.3 | $ | 2.2 | ||||||
Exercisable at December 31, 2017 | 194 | $ | 29.06 | 3.3 | $ | 2.2 |
(1) | Of the 194,000 outstanding options, approximately 157,000 were granted under the 2004 Omnibus Stock Plan, and the remaining 37,000 options were granted under the 2012 Omnibus Incentive Plan. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current: | |||||||||||
Federal | $ | (635 | ) | $ | 15,726 | $ | 4,806 | ||||
State | 545 | 1,623 | 2,380 | ||||||||
Foreign | 2,040 | 1,021 | 350 | ||||||||
Total current | 1,950 | 18,370 | 7,536 | ||||||||
Deferred: | |||||||||||
Federal | (46,103 | ) | 1,662 | 12,450 | |||||||
State | (6,576 | ) | (274 | ) | 1,482 | ||||||
Foreign | (1,270 | ) | (81 | ) | 202 | ||||||
Total deferred | (53,949 | ) | 1,307 | 14,134 | |||||||
Income tax expense for continuing operations | $ | (51,999 | ) | $ | 19,677 | $ | 21,670 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
U.S. | $ | (221,137 | ) | $ | 56,141 | $ | 85,164 | ||||
Foreign | (1,367 | ) | 3,016 | (1,599 | ) | ||||||
Total | $ | (222,504 | ) | $ | 59,157 | $ | 83,565 |
Year Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
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 | 2.7 | 1.7 | 4.6 | |||||
Goodwill impairment charges | (10.2 | ) | — | — | ||||
U.S. federal rate change | (3.4 | ) | — | — | ||||
Transition tax on accumulated foreign earnings, net of credits | (0.3 | ) | — | — | ||||
Stock-based compensation | (0.8 | ) | — | — | ||||
Meals and entertainment | (0.3 | ) | 1.1 | 0.6 | ||||
Valuation allowance | (0.2 | ) | (3.2 | ) | 0.5 | |||
Foreign source income | 0.1 | (0.5 | ) | 0.5 | ||||
Tax credits / Section 199 Deduction | 0.2 | (1.1 | ) | (1.0 | ) | |||
Net tax benefit related to “check-the-box” election (1) | 1.2 | — | (14.7 | ) | ||||
Other | (0.6 | ) | 0.3 | 0.4 | ||||
Effective income tax rate for continuing operations | 23.4 | % | 33.3 | % | 25.9 | % |
(1) | 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 realized 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. Due to the expiration of statute of limitations, in the third quarter of 2017, we recognized a $2.7 million tax benefit, including the reversal of accrued interest and penalties, related to a previously unrecognized tax benefit from our "check-the-box" election made in 2014 to treat one of our wholly-owned foreign subsidiaries as a disregarded entity for U.S federal income tax purposes. |
As of December 31, | |||||||
2017 | 2016 | ||||||
Deferred tax assets: | |||||||
Share-based compensation | $ | 5,674 | $ | 10,151 | |||
Accrued payroll and other liabilities | 7,010 | 10,004 | |||||
Intangibles and goodwill | 2,137 | — | |||||
Deferred lease incentives | 4,352 | 4,666 | |||||
Convertible note hedge transactions | 250 | 12,197 | |||||
Revenue recognition | 1,586 | 1,983 | |||||
Restructuring charge liability | 1,104 | 2,230 | |||||
Net operating loss carry-forwards | 495 | 92 | |||||
Tax credits | 1,918 | 1,804 | |||||
Other | 882 | 1,934 | |||||
Total deferred tax assets | 25,408 | 45,061 | |||||
Valuation allowance | (1,247 | ) | (626 | ) | |||
Net deferred tax assets | 24,161 | 44,435 | |||||
Deferred tax liabilities: | |||||||
Prepaid expenses | (1,229 | ) | (2,500 | ) | |||
Property and equipment | (4,031 | ) | (2,933 | ) | |||
Intangibles and goodwill | — | (60,411 | ) | ||||
Convertible note discount | (3 | ) | (11,586 | ) | |||
Convertible debt investment | (3,110 | ) | (2,600 | ) | |||
Other | (133 | ) | (38 | ) | |||
Total deferred tax liabilities | (8,506 | ) | (80,068 | ) | |||
Net deferred tax asset (liability) for continuing operations | $ | 15,655 | $ | (35,633 | ) |
Unrecognized Tax Benefits | ||||
Balance at January 1, 2015 | $ | 2,488 | ||
Additions based on tax positions related to the current year | 735 | |||
Balance at December 31, 2015 | 3,223 | |||
Additions based on tax positions related to the current year | 117 | |||
Balance at December 31, 2016 | 3,340 | |||
Decrease due to lapse of statute of limitations | (2,410 | ) | ||
Decrease based on tax positions related to the prior year | (117 | ) | ||
Balance at December 31, 2017 | $ | 813 |
Operating Lease Obligations | Sublease Income | |||||||
2018 | $ | 14,739 | $ | 1,316 | ||||
2019 | 13,444 | 291 | ||||||
2020 | 12,266 | — | ||||||
2021 | 11,298 | — | ||||||
2022 | 10,409 | — | ||||||
Thereafter | 37,804 | — | ||||||
Total | $ | 99,960 | $ | 1,607 |
• | Healthcare |
• | Education |
• | Business Advisory |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Healthcare: | |||||||||||
Revenues | $ | 356,909 | $ | 424,912 | $ | 446,887 | |||||
Operating income | $ | 118,761 | $ | 147,903 | $ | 169,560 | |||||
Segment operating income as a percentage of segment revenues | 33.3 | % | 34.8 | % | 37.9 | % | |||||
Education: | |||||||||||
Revenues | $ | 167,908 | $ | 149,817 | $ | 134,009 | |||||
Operating income | $ | 40,318 | $ | 38,310 | $ | 32,246 | |||||
Segment operating income as a percentage of segment revenues | 24.0 | % | 25.6 | % | 24.1 | % | |||||
Business Advisory: | |||||||||||
Revenues | $ | 207,753 | $ | 151,543 | $ | 116,892 | |||||
Operating income | $ | 46,600 | $ | 29,382 | $ | 31,233 | |||||
Segment operating income as a percentage of segment revenues | 22.4 | % | 19.4 | % | 26.7 | % | |||||
All Other: (1) | |||||||||||
Revenues | $ | — | $ | — | $ | 1,222 | |||||
Operating loss | $ | — | $ | — | $ | (1,718 | ) | ||||
Segment operating loss as a percentage of segment revenues | N/A | N/A | N/M | ||||||||
Total Company: | |||||||||||
Revenues | $ | 732,570 | $ | 726,272 | $ | 699,010 | |||||
Reimbursable expenses | 75,175 | 71,712 | 70,013 | ||||||||
Total revenues and reimbursable expenses | $ | 807,745 | $ | 797,984 | $ | 769,023 | |||||
Segment operating income | $ | 205,679 | $ | 215,595 | $ | 231,321 | |||||
Items not allocated at the segment level: | |||||||||||
Other operating expenses | 120,718 | 111,852 | 112,164 | ||||||||
Litigation and other losses (gains), net | 1,111 | (1,990 | ) | (9,476 | ) | ||||||
Depreciation and amortization | 38,213 | 31,499 | 25,135 | ||||||||
Goodwill impairment charges (2) | 253,093 | — | — | ||||||||
Other expense, net | 15,048 | 15,077 | 19,933 | ||||||||
Income (loss) from continuing operations before taxes | $ | (222,504 | ) | $ | 59,157 | $ | 83,565 |
(1) | During 2015, we wound down the businesses within our All Other operating segment, which consisted of our public sector consulting practice and our foreign consulting operations based in the Middle East. We did not generate any revenues from our All Other segment during 2016 and 2017. |
(2) | The goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance. |
As of December 31, | ||||||||||||
Segment Assets: | 2017 | 2016 | 2015 | |||||||||
Healthcare | $ | 70,097 | $ | 69,274 | $ | 84,088 | ||||||
Education | 31,367 | 33,094 | 28,192 | |||||||||
Business Advisory | 58,217 | 43,151 | 29,609 | |||||||||
Unallocated assets (1) | 877,247 | 1,007,696 | 1,017,654 | |||||||||
Total assets | $ | 1,036,928 | $ | 1,153,215 | $ | 1,159,543 |
(1) | Unallocated assets includes goodwill and intangible assets and our convertible debt investment, as management does not evaluate these items at the segment level when assessing segment performance or allocating resources. Refer to Note 5 “Goodwill and Intangible Assets" and Note 12 "Fair Value of Financial Instruments" for further information on these assets. |
Beginning balance | Additions (1) | Deductions | Ending balance | ||||||||||
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 | |||||||
Year ended December 31, 2016: | |||||||||||||
Allowances for doubtful accounts and unbilled services | $ | 16,886 | 48,901 | 44,528 | $ | 21,259 | |||||||
Valuation allowance for deferred tax assets | $ | 2,242 | 113 | 1,729 | $ | 626 | |||||||
Year ended December 31, 2017: | |||||||||||||
Allowances for doubtful accounts and unbilled services | $ | 21,259 | 43,888 | 40,648 | $ | 24,499 | |||||||
Valuation allowance for deferred tax assets | $ | 626 | 793 | 172 | $ | 1,247 |
(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 | |||||||||||||||
2017 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||
Revenues | $ | 188,849 | $ | 181,418 | $ | 176,376 | $ | 185,927 | |||||||
Reimbursable expenses | 16,950 | 20,930 | 17,982 | 19,313 | |||||||||||
Total revenues and reimbursable expenses | 205,799 | 202,348 | 194,358 | 205,240 | |||||||||||
Gross profit | 70,203 | 64,981 | 59,847 | 71,540 | |||||||||||
Operating income (loss) | 14,149 | (200,575 | ) | 6,098 | (27,128 | ) | |||||||||
Net income (loss) from continuing operations | 5,155 | (150,482 | ) | 4,132 | (29,310 | ) | |||||||||
Income (loss) from discontinued operations, net of tax | 143 | 309 | 238 | (302 | ) | ||||||||||
Net income (loss) | 5,298 | (150,173 | ) | 4,370 | (29,612 | ) | |||||||||
Net earnings (loss) per basic share: | |||||||||||||||
Net income (loss) from continuing operations | $ | 0.24 | $ | (7.00 | ) | $ | 0.19 | $ | (1.36 | ) | |||||
Income (loss) from discontinued operations, net of tax | 0.01 | 0.01 | 0.01 | (0.02 | ) | ||||||||||
Net income (loss) | $ | 0.25 | $ | (6.99 | ) | $ | 0.20 | $ | (1.38 | ) | |||||
Net earnings (loss) per diluted share: | |||||||||||||||
Net income (loss) from continuing operations | $ | 0.24 | $ | (7.00 | ) | $ | 0.19 | $ | (1.36 | ) | |||||
Income (loss) from discontinued operations, net of tax | 0.01 | 0.01 | 0.01 | (0.02 | ) | ||||||||||
Net income (loss) | $ | 0.25 | $ | (6.99 | ) | $ | 0.20 | $ | (1.38 | ) | |||||
Weighted average shares used in calculating earnings per share: | |||||||||||||||
Basic | 21,239 | 21,492 | 21,505 | 21,515 | |||||||||||
Diluted | 21,474 | 21,492 | 21,622 | 21,515 |
Quarter Ended | |||||||||||||||
2016 | Mar. 31 | Jun. 30 | Sep. 30 | Dec. 31 | |||||||||||
Revenues | $ | 180,489 | $ | 184,259 | $ | 183,400 | $ | 178,124 | |||||||
Reimbursable expenses | 16,561 | 18,982 | 19,093 | 17,076 | |||||||||||
Total revenues and reimbursable expenses | 197,050 | 203,241 | 202,493 | 195,200 | |||||||||||
Gross profit | 65,180 | 77,138 | 71,131 | 60,090 | |||||||||||
Operating income | 14,376 | 28,209 | 23,240 | 8,409 | |||||||||||
Net income from continuing operations | 6,866 | 16,139 | 12,288 | 4,187 | |||||||||||
Income (loss) from discontinued operations, net of tax | (864 | ) | (970 | ) | 4 | (33 | ) | ||||||||
Net income | 6,002 | 15,169 | 12,292 | 4,154 | |||||||||||
Net earnings per basic share: | |||||||||||||||
Net income from continuing operations | $ | 0.33 | $ | 0.77 | $ | 0.58 | $ | 0.20 | |||||||
Income (loss) from discontinued operations, net of tax | (0.05 | ) | (0.05 | ) | — | — | |||||||||
Net income | $ | 0.28 | $ | 0.72 | $ | 0.58 | $ | 0.20 | |||||||
Net earnings per diluted share: | |||||||||||||||
Net income from continuing operations | $ | 0.32 | $ | 0.76 | $ | 0.57 | $ | 0.19 | |||||||
Income (loss) from discontinued operations, net of tax | (0.04 | ) | (0.05 | ) | — | — | |||||||||
Net income | $ | 0.28 | $ | 0.71 | $ | 0.57 | $ | 0.19 | |||||||
Weighted average shares used in calculating earnings per share: | |||||||||||||||
Basic | 21,114 | 21,061 | 21,076 | 21,083 | |||||||||||
Diluted | 21,460 | 21,376 | 21,445 | 21,473 |
Name | Jurisdiction of Organization | |
Huron Consulting Group Holdings LLC | Delaware | |
Huron Consulting Services LLC | Delaware | |
Huron Consulting South East Asia PTE. LTD. | Singapore | |
Huron Solutions FZ-LLC | United Arab Emirates—Dubai | |
Huron Consulting Saudi Limited | Saudi Arabia | |
Huron Saudi Limited | Saudi Arabia | |
Huron Management Services LLC | Delaware | |
Huron Demand LLC | Delaware | |
Conseillers Huron Canada Limitée | Canada | |
Huron Technologies Inc. | Delaware | |
Huron Transaction Advisory LLC | Delaware | |
Studer Holdings, Inc. | Delaware | |
The Studer Group, LLC | Florida | |
Huron Eurasia India Private Limited | India | |
Pope Woodhead and Associates | England and Wales | |
Innosight Holdings, LLC | Delaware | |
Innosight International, LLC | Delaware | |
Innosight Consulting Asia Pacific PTE. LTD. | Singapore | |
Innosight Consulting SARL | Switzerland | |
Innosight Consulting, LLC | Delaware | |
Huron Aviation One LLC | Delaware | |
Huron Aviation Two LLC | Delaware |
/s/ PricewaterhouseCoopers LLP |
Chicago, IL |
February 28, 2018 |
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 28, 2018 | 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 28, 2018 | By: | /S/ JOHN D. KELLY | |||
John D. Kelly | ||||||
Executive Vice President, 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 28, 2018 | 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 28, 2018 | By: | /S/ JOHN D. KELLY | |||
John D. Kelly | ||||||
Executive Vice President, Chief Financial Officer and Treasurer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Feb. 21, 2018 |
Jun. 30, 2017 |
|
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, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 22,180,119 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 934,900,000 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
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 | 24,560,468 | 24,126,118 |
Treasury stock, shares | 2,443,577 | 2,408,343 |
Description of Business |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Huron is a global professional services firm committed to achieving sustainable results in partnership with its clients. We bring a depth of expertise in strategy, technology, operations, advisory services, and analytics to drive lasting and measurable results in the healthcare, higher education, life sciences and commercial sectors. |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
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, 2017 and 2016, and the results of operations and cash flows for the years ended December 31, 2017, 2016, and 2015. 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 the second quarter of 2017, we recorded a non-cash pretax goodwill impairment charge of $209.6 million related to our Healthcare reporting unit. During the fourth quarter of 2017, we identified that our calculation of the non-deductible portion of this goodwill impairment charge erroneously excluded a portion of goodwill that was related to an acquisition completed in 2008 that has since been divested. To correct this error, in the fourth quarter of 2017, we recorded a $1.5 million decrease to our non-cash pretax goodwill impairment charge with an offsetting $1.5 million increase to our goodwill balance. We also recorded a $1.5 million decrease to our income tax benefit with an offsetting $1.5 million increase to our deferred tax asset balance. This error had no impact on our consolidated net loss from continuing operations, and we concluded that the impact of the error was not material for the second, third, or fourth quarter financial statements, or the financial statements for the year ended December 31, 2017. During the fourth quarter of 2017, we identified an error on our previously reported consolidated balance sheets as of June 30, 2017 and September 30, 2017 related to the classification of deferred tax assets and liabilities. We incorrectly netted $1.5 million of deferred tax liabilities related to certain jurisdictions with the deferred tax assets of unrelated jurisdictions as of June 30, 2017 and September 30, 2017. This error has been corrected as of December 31, 2017. This error had no impact on our statement of operations, and we concluded that the impact of the error was not material to the second and third quarter financial statements or the financial statements for the year ended December 31, 2017. On December 31, 2015, we sold our Huron Legal segment to a third party. The operations of our Huron Legal segment have been classified as discontinued operations in our consolidated statements of operations for all periods presented. As of December 31, 2017 and 2016, no assets or liabilities of the disposed business remained on our consolidated balance sheet. See Note 3 "Discontinued Operations" for additional information on the divestiture of our Huron Legal segment. 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 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. 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. License revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered. Time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and 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 provided. In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur. We 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. 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 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. When billings do not specifically identify reimbursable expenses, we allocate the portion of the billings equivalent to these expenses to 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. These estimates may differ from actual results. If the financial condition of a client deteriorates in the future, impacting the client’s ability to make payments, an increase to our allowance might be required or our allowance may not be sufficient to cover actual write-offs. We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. 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 benefits and share-based compensation costs, as well as commissions, the cost of outside consultants or subcontractors assigned to revenue-generating activities, technology costs, other third-party costs directly attributable to our revenue-generating activities, and direct expenses to be reimbursed by clients. 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. Long-term Investment 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. If the investment is in an unrealized loss position, we assess whether the investment is other than temporarily impaired. We consider impairments to be other than temporary if they are 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. Aircraft are depreciated over ten years. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the initial term of the lease. Software Development Costs We incur internal and external software development costs related to our cloud computing applications and software for internal use. We capitalize these software development costs incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life. We also incur internal and external software development costs related to our software products that will be sold, leased, or otherwise marketed. We expense these software development costs until technological feasibility has been established. Thereafter and until the software is available for general release to customers, these software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. These capitalized development costs are 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 software development costs as other non-current assets on our consolidated balance sheet. Unamortized capitalized software development costs were $2.0 million and $1.4 million at December 31, 2017 and 2016, respectively. During the years ended December 31, 2017, 2016, and 2015, we amortized $0.8 million, $1.1 million, and $1.0 million, respectively, of capitalized software development costs. Intangible Assets Other Than Goodwill Identifiable intangible assets are amortized over their expected useful lives using a method that reflects the economic benefit expected to be derived from the assets or on a straight-line basis. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Impairment of Long-Lived Assets Long-lived assets, including property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a significant decline in forecasted operating results over an extended period of time. We evaluate the recoverability of long-lived assets based on forecasted undiscounted cash flows. In connection with the goodwill impairment tests performed for the Healthcare and Enterprise Solutions and Analytics reporting units in 2017, which resulted in non-cash goodwill impairment charges, we performed impairment tests on the long-lived assets allocated to the asset groups within the Healthcare and Enterprise Solutions and Analytics reporting units. Based on the impairment tests performed, we concluded that the long-lived assets allocated to the asset groups were not impaired. No impairment charges for long-lived assets were recorded in 2017, 2016, or 2015. 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 six reporting units: Healthcare, Education, Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences. The Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences reporting units make up our 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. In 2017, we performed three goodwill impairment tests: an interim impairment test on our Healthcare reporting unit in the second quarter of 2017; an interim impairment test on our Education and Life Sciences reporting units as a result of our segment reorganization in the second quarter of 2017; and the annual impairment test on all reporting units in the fourth quarter of 2017. As a result of these tests, we recorded total non-cash pretax goodwill impairment charges of $253.1 million. No goodwill impairment charges were recorded in 2016 or 2015. See Note 5 "Goodwill and Intangible Assets" for additional information regarding our interim and annual goodwill impairment tests, and the non-cash goodwill impairment charges recorded in 2017. Business Combinations We use the acquisition method of accounting for business combinations. Each acquired company’s operating results are included in our consolidated financial statements starting on the date of acquisition. The purchase price is equivalent to the fair value of consideration transferred. 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 tangible and intangible assets acquired and liabilities assumed. Contingent consideration, which is primarily based on the business achieving certain performance targets, is recognized at its fair value on the acquisition date, and changes in fair value are recognized in earnings until settled. Refer to Note 12 “Fair Value of Financial Instruments” for further information regarding our contingent acquisition liability balances. Deferred Lease Incentives We record the portion of the deferred lease incentive liability that we expect to recognize over a period greater than one year as a non-current liability. The non-current portion of the deferred lease incentive liability totaled $15.3 million and $10.7 million at December 31, 2017 and 2016, 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 a current liability. We monitor the classification of such liabilities based on the expectation of their utilization periods. 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. Refer to Note 16 "Income Taxes" for information on the impact of the Tax Cuts and Jobs Act of 2017 ("2017 Tax Reform") enacted in the fourth quarter on our consolidated financial statements. Share-Based Compensation Share-based compensation cost is measured based on the grant date fair value of the respective awards. We generally recognize share-based compensation ratably using the straight-line attribution method; however, for those awards with performance criteria and graded vesting features, we use the graded vesting attribution method. It is our policy to account for forfeitures as they occur. Sponsorship and Advertising Costs Sponsorship and advertising costs are expensed as incurred. Such expenses for the years ended December 31, 2017, 2016, and 2015 totaled $6.6 million, $7.1 million, and $6.4 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. 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 other non-current assets. Unamortized debt issuance costs attributable to our Convertible Notes are recorded as a deduction from the carrying amount of the debt liability. Foreign Currency Assets and liabilities of foreign subsidiaries whose functional currency is not the United States Dollar (USD) are translated into the USD using the exchange rates in effect at period end. Revenue and expense items are translated using the average exchange rates for the period. Foreign currency translation adjustments are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Foreign currency transaction gains and losses are included in other income, net on the statement of earnings. We recognized $0.4 million of foreign currency transaction gains in 2017, de minimis foreign currency transaction gains in 2016, and $1.6 million of foreign currency transaction losses in 2015. Segment Reporting Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker manages the business under three operating segments, which are reportable segments: Healthcare, Education, and Business Advisory. During the second quarter of 2017, we reorganized our internal financial reporting structure, which management uses to assess performance and allocate resources, by moving our Life Sciences practice from the Education and Life Sciences segment to the Business Advisory segment. The remaining Education and Life Sciences segment is now referred to as the Education segment. While our consolidated results have not been impacted, we have reclassified our historical segment information for consistent presentation. New Accounting Pronouncements Recently Adopted In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows entities to reclassify stranded tax effects resulting from the enactment of the 2017 Tax Cuts and Jobs Act ("2017 Tax Reform") from accumulated other comprehensive income to retained earnings. We adopted ASU 2018-02 upon issuance and reclassified $0.5 million of stranded tax effects, primarily related to our convertible debt investment, from accumulated other comprehensive income to retained earnings as of December 31, 2017. Refer to Note 16 "Income Taxes" for additional information on the 2017 Tax Reform. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which required us to determine the implied fair value of goodwill by allocating the reporting unit's fair value to each of its assets and liabilities as if the reporting unit was acquired in a business acquisition. Instead, the updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. We adopted this ASU in the second quarter of 2017 on a prospective basis and applied the new guidance to our interim goodwill impairment tests performed in the second quarter of 2017 and our annual impairment test performed as of November 30, 2017. Refer to Note 5 “Goodwill and Intangible Assets” for additional information on our interim and annual goodwill impairment tests performed. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statement of cash flows, and forfeitures. We adopted this guidance in the first quarter of 2017, at which time we began recognizing excess tax benefits and deficiencies as income tax benefit or expense in our consolidated statements of operations on a prospective basis. We recognized $1.8 million of net excess tax deficiencies as income tax expense in our consolidated statement of operations for the year ended December 31, 2017. Additionally, upon adoption, we began classifying excess tax benefits as an operating activity on the statement of cash flows on a retrospective basis. As a result, we reclassified $0.9 million and $3.6 million of excess tax benefits for the years ended December 31, 2016 and 2015, respectively, from cash flows from financing activities to cash flows from operating activities on our statement of cash flows. We elected to account for share-based award forfeitures as they occur, and applied this accounting change on a modified retrospective basis as a cumulative-effect adjustment to retained earnings of $0.4 million during the first quarter of 2017. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments. ASU 2016-06 clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. We adopted these amendments in the first quarter of 2017 on a modified retrospective basis. The adoption of these amendments did not have any impact on our consolidated financial statements. Not Yet Adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments to the guidance improve and simplify accounting rules for hedge accounting to better present the economic results of an entity’s risk management activities in its financial statements and improve the disclosures of hedging arrangements. Additionally, ASU 2017-12 simplifies the hedge documentation and effectiveness assessment requirements. The updated guidance is effective for us beginning January 1, 2019. We do not expect this guidance to have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC Topic 840, Leases, and sets forth the principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record on the balance sheet a right-of-use asset and a lease liability, equal to the present value of the remaining lease payments, for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or a straight-line basis over the term of the lease. ASU 2016-02 will be effective for us beginning January 1, 2019, with early adoption permitted. Entities are required to use a modified retrospective transition method for existing leases. We are currently evaluating the potential impact this guidance will have on our consolidated financial statements. In January 2016, the FASB issued ASU 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 do not expect this guidance to have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 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 accordance with the new standard, we will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method, under which the new guidance will be applied to the current period presented in the financial statements and a cumulative-effect adjustment will be recorded as of the date of adoption. We are currently completing our analysis to determine the impact of ASC 606 on our consolidated financial statements, and expect the more impactful aspect of ASC 606 will relate to how we recognize revenue under performance-based fee billing arrangements. Currently, we recognize revenue under these arrangements once all related performance criteria are met and the amount to be recognized is fixed or determinable. However, upon adoption of the new standard, we will estimate these amounts and recognize the estimated amounts as services are performed over the contractual term of the engagements. The cumulative-effect adjustment will capture the amount of revenue we would have recognized on all outstanding performance-based fee billing arrangements under ASC 606 as of the adoption date, and record the difference as a cumulative-effect adjustment to retained earnings. Further, ASC 606 provides for certain practical expedients that we intend to use, including the option to expense contract acquisition costs as incurred if the contract term is one year or shorter. We also intend to use the as-invoiced practical expedient, which permits us to recognize revenue in the amount to which we have the right to invoice a customer if that amount corresponds to the value of the performance completed to date. |
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 this 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 Huron. Huron Legal provided eDiscovery services, consulting services and contract management services related to law department management, information governance and compliance, legal discovery, litigation management, and legal analytics. The sale closed on December 31, 2015, at which time we received proceeds of $110.1 million and recognized a pretax disposal loss of $2.3 million. The divestiture of the Huron Legal segment represented a strategic shift that had a major effect on our operations and financial results. As such, the operations of our Huron Legal segment have been classified as discontinued operations in our consolidated statements of operations for all periods presented. As of December 31, 2017 and 2016, no assets or liabilities of the disposed business remained on our consolidated balance sheets. For the year ended December 31, 2017, we recognized income from discontinued operations, net of tax, of $0.4 million primarily related to updated lease assumptions for vacated office space directly related to the sale of the Huron Legal segment. For the year ended December 31, 2016, we recognized a loss from discontinued operations, net of tax, of $1.9 million, primarily related to obligations for former employees, legal fees, and updated lease assumptions for vacated office space directly related to the sale of the Huron Legal segment. The table below summarizes the operating results of Huron Legal for the year ended December 31, 2015.
(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.
The table below summarizes the amounts reflected in our consolidated statements of cash flows that relate to the discontinued operations for the year ended December 31, 2015.
In connection with the sale of Huron Legal, we entered into a transition services agreement ("TSA") with Consilio, under which we provided certain post-closing services, support, and facilities to Consilio to facilitate an orderly transfer of the Huron Legal business operations. Billings under the TSA, which we did not consider to be significant, were recorded as a reduction of the costs to provide the respective services, primarily in selling, general and administrative expenses in the consolidated statements of operations. Services under the TSA ended as of June 30, 2017. We have no continuing involvement with the Huron Legal segment. |
Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions 2017 Pope Woodhead and Associates Limited On January 9, 2017, we completed our acquisition of Pope Woodhead and Associates Limited ("Pope Woodhead"), a U.K.-based consulting firm providing market access capabilities to assist clients in developing value propositions for innovative medicines and technologies. The acquisition expands our life sciences strategy expertise and strengthens our ability to lead clients through complex payer and regulatory environments. Pope Woodhead's results of operations have been included in our consolidated financial statements and the results of operations of our Business Advisory segment from the date of acquisition. ADI Strategies, Inc. On April 1, 2017, we completed our acquisition of the international assets of ADI Strategies, Inc. ("ADI Strategies") in Dubai and India. We acquired the U.S. assets of ADI Strategies in the second quarter of 2016. ADI Strategies is a leading enterprise performance management, risk management and business intelligence firm. The acquisition strengthens our technology and analytics competencies and expands our global reach. The international results of operations of ADI Strategies have been included in our consolidated financial statements and results of operations of the Business Advisory segment from the date of acquisition. The acquisitions of ADI Strategies and Pope Woodhead are not significant to our consolidated financial statements individually or in the aggregate as of and for the twelve months ended December 31, 2017. Innosight Holdings, LLC On March 1, 2017, we acquired 100% of the membership interests of Innosight Holdings, LLC ("Innosight"). Innosight is a growth strategy firm focused on helping companies navigate disruptive change and manage strategic transformation. Together with Innosight, we use our strategic, operational, and technology capabilities to help clients across multiple industries develop pioneering solutions to address disruption and achieve sustained growth. 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 current fair values of assets acquired and liabilities assumed are considered preliminary and are based on the information that is currently available. We believe that the information provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed, but certain items, such as working capital amounts, may be subject to change as additional information is received. Thus, the provisional measurements of fair value and goodwill are subject to change. We will finalize the valuation in the first quarter of 2018. The acquisition date fair value of the consideration transferred for Innosight was $113.6 million, which consisted of the following:
We funded the cash component of the purchase price with cash on hand and borrowings of $89.0 million under our senior secured credit facility. We issued 221,558 shares of our common stock as part of the consideration transferred, with an acquisition date fair value of $9.6 million based on our common stock's closing price of $43.15 on the date of acquisition. The contingent consideration liability of $12.1 million represents the acquisition date fair value of the contingent consideration arrangement, pursuant to which we may be required to pay additional consideration to the sellers if specific financial performance targets are met over a four-year term. The maximum amount of contingent consideration that may be paid is $35.0 million. See Note 12 "Fair Value of Financial Instruments" for additional information on the valuation of contingent consideration liabilities. The following table summarizes the preliminary 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 5.6 years. Customer relationships and customer contracts represent the fair values of the underlying relationships and agreements with Innosight customers. The trade name represents the fair value of the brand and name recognition associated with the marketing of Innosight's service offerings. Non-compete agreements represent the value derived from preventing certain Innosight executives from entering into or starting a similar, competing business. The favorable lease contract represents the difference between the fair value and minimum lease obligations under the current outstanding lease. Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed, and largely reflects the expanded market opportunities expected from combining the service offerings of Huron and Innosight, as well as the assembled workforce of Innosight. Goodwill recognized in conjunction with the acquisition of Innosight was recorded in the Business Advisory segment. Goodwill of $87.4 million is expected to be deductible for income tax purposes. Innosight’s results of operations have been included in our unaudited consolidated statements of operations and results of operations of our Business Advisory segment from the date of acquisition. For the year ended December 31, 2017, revenues from Innosight were $34.3 million and operating loss was $0.9 million, which included $3.4 million of amortization expense for intangible assets acquired. In connection with the acquisition of Innosight, we incurred $1.7 million of transaction and acquisition-related expenses. Of the $1.7 million of expense, $1.4 million was incurred in the first quarter of 2017 and $0.3 million was incurred in the second quarter in 2017. These costs are recorded in selling, general and administrative expenses. The following unaudited supplemental pro forma information summarizes the combined results of operations of Huron and Innosight as though the companies were combined on January 1, 2016.
The historical financial information has been adjusted to give effect to pro forma adjustments consisting of intangible asset amortization expense, acquisition-related costs, interest expense, and the related income tax effects. The unaudited pro forma information above includes adjustments to include additional expense of $0.6 million and $11.4 million for the years ended December 31, 2017 and 2016, respectively. Additionally, the historical financial information has been adjusted to give effect to the shares issued as consideration. All of these adjustments are based upon currently available information and certain assumptions. Therefore, the pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2016. The historical results included in the pro forma consolidated results do not purport to project future results of operations of the combined companies nor do they reflect the expected realization of any cost savings or revenue synergies associated with the acquisition. 2016 MyRounding Solutions, LLC On February 1, 2016, we completed the acquisition of MyRounding Solutions, LLC ("MyRounding"), a Denver, Colorado-based firm specializing in digital health solutions to improve patient care. The MyRounding application is designed to standardize, automate, and track rounding activity, allowing nurses and staff to improve the care and experience of patients in real time. The addition of MyRounding expands the integration of our software and consulting solutions and strengthens our transformation services for healthcare providers. The results of operations of MyRounding have been included in our consolidated financial statements and the results of operations of our Healthcare segment from the date of acquisition. ADI Strategies, Inc. On May 1, 2016, we completed the acquisition of the U.S. assets of ADI Strategies, Inc. ("ADI Strategies"), a leading enterprise performance management, risk management, and business intelligence firm focused on implementing the Oracle enterprise application suite. The results of operations of ADI Strategies have been included in our consolidated financial statements and the results of operations of our Business Advisory segment from the date of acquisition. Healthcare Services Management, Inc. On August 1, 2016, we completed the acquisition of Healthcare Services Management, Inc. ("HSM Consulting"), a firm specializing in healthcare information technology and management consulting. The results of operations of HSM Consulting have been included in our consolidated financial statements and results of operations of our Healthcare segment from the date of acquisition. The acquisitions of MyRounding, ADI Strategies, and HSM Consulting are not significant to our consolidated financial statements individually or in the aggregate as of and for the twelve months ended December 31, 2016. 2015 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 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 our stock 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 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 operations and other comprehensive income and results of operations of our Healthcare segment from the date of acquisition. For the year 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 unaudited supplemental pro forma information summarizes the combined results of operations for Huron and Studer Group for the twelve months ended December 31, 2015 as though the companies were combined on January 1, 2014.
The historical financial information shown above has been adjusted to give effect to pro forma adjustments totaling $2.4 million of additional expense, which consist of intangible assets amortization expense, acquisition-related costs, interest expense, and the related income tax effects. The historical per share information has been adjusted to give effect to the 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 our consolidated results of operations actually would have been had we 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. Sky Analytics' results of operations were 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. Rittman Mead India's results of operations have been included in our consolidated financial statements and results of operations of our 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. Cloud62's results of operations have been included in our consolidated financial statements and results of operations of our Business Advisory segment from the date of acquisition. The acquisitions of Sky Analytics, Rittman Mead India, and Cloud62 were not significant to our consolidated financial statements individually or in the aggregate as of and for the twelve months ended December 31, 2015. |
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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, 2017 and 2016.
Second Quarter 2017 Goodwill Impairment Charge During the second quarter of 2017, we performed a goodwill impairment analysis for our Healthcare reporting unit as our Healthcare business had experienced a prolonged period of declining revenues, primarily driven by softness in our revenue cycle offering within our performance improvement solution. This softness was attributable to decreased demand for our services, the winding down of some of our larger projects, and a trend toward smaller projects, as well as fewer large integrated projects. In light of these challenges, several initiatives were undertaken to improve the segment's financial performance, including repositioning our solutions to address the most critical needs of our clients, the expansion of our existing services such as those in our Studer Group, strategy, physician and technology offerings, and workforce reductions to better align resources with market demand. While these initiatives have yielded some positive impacts, hospitals and health systems continue to face regulatory and funding uncertainty; therefore, we remain cautious about near-term growth. As we had previously disclosed in prior quarters, if the financial performance of our Healthcare segment continued to decline and did not meet our expectations, we could be required to perform an interim impairment analysis with respect to our carrying value of goodwill for the Healthcare reporting unit prior to our usual annual test. Based on forecasts prepared in the second quarter of 2017 in connection with our quarterly forecasting cycle, we determined that the likely time frame to improve the financial results of this segment would take longer than originally anticipated. As such, we concluded, during the second quarter of 2017, that the fair value of the Healthcare reporting unit may have no longer exceeded its carrying value. In connection with the preparation of our financial statements for the quarter ended June 30, 2017, we performed an interim impairment test on the Healthcare reporting unit. Our goodwill impairment test was performed by comparing the fair value of the Healthcare reporting unit with its carrying value and, in accordance with ASU 2017-04, which we adopted in the second quarter of 2017, recognizing an impairment charge for the amount by which the carrying value exceeded the fair value. To estimate the fair value of the Healthcare reporting unit, we relied on a combination of the income approach and the market approach, utilizing the guideline company method, with a fifty-fifty weighting. Based on the estimated fair value of the Healthcare reporting unit, we recorded a $209.6 million non-cash pretax charge in the second quarter of 2017 to reduce the carrying value of goodwill in our Healthcare reporting unit. As discussed in Note 2 "Summary of Significant Accounting," during the fourth quarter of 2017, we identified that our calculation of the non-deductible portion of our goodwill impairment charge recorded in the second quarter of 2017 erroneously excluded a portion of goodwill that was related to an acquisition completed in 2008 and has since been divested. To correct this error, in the fourth quarter of 2017, we recorded a $1.5 million decrease to our non-cash pretax goodwill impairment charge related to our Healthcare reporting unit. The total non-cash pretax goodwill impairment charge recorded in 2017 related to our Healthcare reporting unit, including the adjustment in the fourth quarter of 2017, was $208.1 million. In connection with the goodwill impairment test performed on the Healthcare reporting unit, we performed an impairment test on the long-lived assets allocated to the asset groups within the Healthcare reporting unit. Based on the impairment test performed, we concluded that the long-lived assets allocated to the asset groups within the Healthcare reporting unit were not impaired as of June 30, 2017. Second Quarter 2017 Goodwill Reallocation As a result of the segment reorganization in the second quarter of 2017, we reallocated $10.8 million of the goodwill balance associated with the previous Education and Life Sciences reporting unit to the new Life Sciences reporting unit based on the relative fair values of the Life Sciences reporting unit and the remaining Education reporting unit. The estimated fair values were determined using a combination of the income approach and the market approach, utilizing the guideline company method, with a fifty-fifty weighting. In conjunction with the goodwill reallocation, we performed a goodwill impairment test for the goodwill balances within our Education reporting unit and Life Sciences reporting unit as of June 1, 2017. Based on the results of the goodwill impairment test, we determined that the fair values of our Education reporting unit and Life Sciences reporting unit exceeded their carrying values. As such, we concluded that there was no indication of goodwill impairment for either reporting unit at that time. 2017 Annual Goodwill Impairment Test Pursuant to our policy, we performed our annual goodwill impairment test as of November 30, 2017 for our six reporting units with goodwill balances: Healthcare, Education, Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences. We elected to bypass the qualitative assessment and proceeded directly to the quantitative goodwill impairment test. For each reporting unit, we reviewed goodwill for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. In estimating the fair value of each reporting unit, we relied on a combination of the income approach and the market approach, utilizing the guideline company method, with a fifty-fifty weighting. Based on the results of the goodwill impairment test, we determined that the fair value of the Healthcare, Education, Business Advisory, Strategy and Innovation, and Life Sciences reporting units exceeded its carrying value by 40%, 120%, 115%, 33%, and 14%, respectively. As such, we concluded that there was no indication of goodwill impairment for these five reporting units. However, the results of the quantitative impairment test indicated that the fair value of the Enterprise Solutions and Analytics reporting unit did not exceed its carrying value. Based on the estimated fair value of the Enterprise Solutions and Analytics reporting unit, we recorded a $45.0 million non-cash pretax charge to reduce the carrying value of this reporting unit's goodwill to zero. Our Enterprise Solutions and Analytics reporting unit was established with the acquisition of Blue Stone International, LLC in 2013. Since that time, we completed five additional business acquisitions within the reporting unit, most recently the acquisitions of the U.S. assets and international assets of ADI Strategies in May 2016 and April 2017, respectively. We record the assets acquired and liabilities assumed in business combinations, including identifiable intangible assets, at their estimated fair values as of the acquisition date, and goodwill is recorded as the excess of the fair value of consideration transferred, including any contingent consideration, over the fair value of the net assets acquired. Therefore, the initial accounting for an acquisition results in its fair value equaling its carrying value. As we have previously disclosed in prior quarters, due to this reporting unit’s relatively low headroom, in the event that the financial performance of the reporting unit did not meet our expectations during 2017, we could be required to take a non-cash impairment charge as a result of any goodwill impairment test. During the first three quarters of 2017, the performance of Enterprise Solutions and Analytics continued to reasonably meet our expectations. However, both revenues and operating margin during the fourth quarter of 2017 fell short of our expectations resulting in a reduction in workforce within the reporting unit during that quarter. Further, in connection with our annual budget process for 2018, which coincided with our annual goodwill impairment test during the fourth quarter of 2017, we determined that the reporting unit's expected future revenue growth rates and operating margin would be lower than previously anticipated for this reporting unit. As a result, our goodwill impairment test indicated that the fair value of the Enterprise Solutions and Analytics reporting unit no longer exceeded its carrying value, and we recorded a $45.0 million non-cash pretax charge to write off the entire carrying value of this reporting unit's goodwill. In connection with the goodwill impairment test performed on the Enterprise Solutions and Analytics reporting unit, we performed an impairment test on the long-lived assets allocated to the asset groups within the Enterprise Solutions and Analytics reporting unit. Based on the impairment test performed, we concluded that the long-lived assets allocated to the asset groups within the Enterprise Solutions and Analytics reporting unit were not impaired as of November 30, 2017. Further, we evaluated whether any events have occurred or any circumstances have changed since November 30, 2017 that would indicate any additional goodwill may have become impaired since our annual impairment test. Based on our evaluation as of December 31, 2017, which included the impact of the 2017 Tax Reform on our deferred tax balances and forecasted tax rates, we determined that no indications of impairment have arisen since our annual goodwill impairment test. The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in additional non-cash goodwill impairment charges. Intangible Assets Intangible assets as of December 31, 2017 and 2016 consisted of the following:
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships and customer contracts, as well as certain trade names and technology and software, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis. In connection with the acquisition of MyRounding, we acquired in-process technology which was accounted for as an indefinite-lived intangible asset until the development of the technology was complete, which occurred in the first quarter of 2017. Upon completion, we reclassified the technology to definite-lived technology and software, and began amortizing the asset over a five-year useful life on a straight-line basis. Intangible assets amortization expense was $35.0 million, $33.1 million, and $28.7 million for the years ended December 31, 2017, 2016, and 2015, respectively. The table below sets forth the estimated annual amortization expense for each of the five succeeding years for the intangible assets recorded as of December 31, 2017.
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors. |
Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Depreciation expense for property and equipment was $13.3 million, $12.5 million, and $12.3 million for the years ended December 31, 2017, 2016, and 2015, respectively. Property and equipment, net at December 31, 2017 and 2016 consisted of the following:
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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:
Below is a summary of the scheduled remaining principal payments of our debt as of December 31, 2017.
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 convertible note hedge transactions and 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. 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, 2017, the remaining life of the Convertible Notes is 1.8 years. The equity component will not be remeasured as long as it continues to meet the conditions for equity classification. The transaction costs related to the issuance of the Convertible Notes were separated into liability and equity components based on their relative values, as determined above. Transaction costs attributable to the liability component are recorded as a deduction to the carrying amount of the liability and amortized to interest expense over the term of the Convertible Notes; and transaction costs attributable to the equity component are netted with the equity component of the Convertible Notes in stockholders’ equity. Total debt issuance costs were approximately $7.3 million, of which $6.2 million was allocated to liability issuance costs and $1.1 million was allocated to equity issuance costs. As of December 31, 2017 and 2016, the Convertible Notes consisted of the following:
The following table presents the amount of interest expense recognized related to the Convertible Notes for the periods presented.
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 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 deferred income taxes, net on the consolidated balance sheets. Senior Secured Credit Facility The Company has a $500 million five-year senior secured revolving credit facility, subject to the terms of a Second Amended and Restated Credit Agreement dated as of March 31, 2015, as amended to date (as amended and modified the "Amended Credit Facility"), that becomes due and payable in full upon maturity on March 31, 2020. The Amended Credit Agreement provides the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount of up to $100 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 a prior credit agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, acquisitions of businesses, share repurchases, and general corporate purposes. Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, two, three or six-month LIBOR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.25% per annum and 2.00% per annum, in the case of LIBOR borrowings, or between 0.25% per annum and 1.00% 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 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 “Pledge Agreement”) with Bank of America, N.A. as collateral agent, pursuant to which the Company and the subsidiary guarantors grant Bank of America, N.A., for the ratable benefit of the lenders under the Amended Credit Agreement, a first-priority lien, subject to permitted liens, on substantially all of the personal property assets of the Company and the subsidiary guarantors, and a pledge of 100% of the stock or other equity interests in all domestic subsidiaries and 65% of the stock or other equity interests in each “material first-tier foreign subsidiary” (as defined in the Pledge Agreement). The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) ranging from 3.25 to 1.00 to 3.75 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, among other items, share-based compensation costs, non-cash goodwill impairment charges, non-cash restructuring charges, and pro forma historical EBITDA for businesses acquired. At December 31, 2017, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 3.02 to 1.00 and a Consolidated Interest Coverage Ratio of 12.43 to 1.00. Borrowings outstanding under the Amended Credit Agreement at December 31, 2017 totaled $105.0 million. These borrowings carried a weighted average interest rate of 3.7%, including the impact of the interest rate swap described in Note 11 “Derivative Instruments and Hedging Activity" that was in effect at December 31, 2017. Borrowings outstanding under the Amended Credit Agreement at December 31, 2016 were $68.0 million and carried a weighted average interest rate of 2.5%, including the impact of the interest rate swap that was in effect at December 31, 2016. 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, 2017, we had outstanding letters of credit totaling $1.9 million, which are primarily used as security deposits for our office facilities. As of December 31, 2017, the unused borrowing capacity under the revolving credit facility was $393.1 million. Promissory Note due 2024 On June 30, 2017, in conjunction with our purchase of an aircraft related to the acquisition of Innosight, we assumed, from the sellers of the aircraft, a promissory note with an outstanding principal balance of $5.1 million. The principal balance of the promissory note is subject to scheduled monthly principal payments until the maturity date of March 1, 2024, at which time a final payment of $1.5 million, plus any accrued and unpaid interest, will be due. Under the terms of the promissory note, we will pay interest on the outstanding principal amount at a rate of one-month LIBOR plus 1.97% per annum. The obligations under the promissory note are secured pursuant to a Loan and Aircraft Security Agreement with Banc of America Leasing & Capital, LLC, which grants the lender a first priority security interest in the aircraft. At December 31, 2017, the outstanding principal amount of the promissory note was $4.9 million. As of December 31, 2017, the aircraft had a carrying amount of $6.5 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, 2017 and 2016, 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 | 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. In periods for which we report a net loss from continuing operations, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss from continuing operations per share would be anti-dilutive. Earnings (loss) per share under the basic and diluted computations are as follows:
The number of 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. We currently have a share repurchase program permitting us to repurchase up to $125 million of our common stock through October 31, 2018 (the "Share Repurchase Program"). The amount and timing of the repurchases will be determined by management and will depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. No shares were repurchased under this program in 2017. In 2016, we repurchased and retired 982,192 shares for $55.3 million, and in 2015, we repurchased and retired 583,880 shares for $34.6 million. As of December 31, 2017, $35.1 million remains available for share repurchases. |
Restructuring Charges |
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Restructuring Charges | Restructuring Charges In 2017, we incurred $6.2 million of pretax restructuring expense. This expense primarily consisted of the following charges: Severance - We incurred $3.7 million of severance expense as a result of workforce reductions to better align resources with market demand. Of the $3.7 million, $2.1 million related to our Healthcare segment, $1.1 million related to our Business Advisory segment, and $0.4 million related to our corporate operations. Office exit costs - We incurred $2.4 million of office exit costs primarily related to the accrual of remaining lease obligations, net of estimated sublease income, due to relocating our San Francisco office to a smaller space and consolidating our Chicago and New York offices, and accelerated depreciation on leasehold improvements for our San Francisco office. Of the $6.2 million pretax restructuring charge, $2.1 million was related to our Healthcare segment, $1.1 million was related to our Business Advisory segment, and $2.9 million was related to our corporate operations. In 2016, we incurred $9.6 million of pretax restructuring expense. This expense consisted of the following charges: Severance - We incurred $7.3 million of severance expense as a result of workforce reductions, of which $6.4 million was related to our Healthcare and Business Advisory segments to better align our resources with market demand and $0.9 million was related to our corporate infrastructure as a result of our Huron Legal divestiture. Office exit costs - We incurred $1.5 million of office exit costs primarily related to our Washington, D.C. space that we vacated in the fourth quarter of 2014. During the third quarter of 2016, we entered into a sublease agreement and adjusted our Washington, D.C. lease accrual to reflect the terms specified in the sublease agreement. Other - We also incurred $0.8 million of restructuring expense related to the wind down of our foreign consulting operations based in the Middle East and other exit costs. Of the $9.6 million pretax restructuring charge, $5.8 million was related to our Healthcare segment, $3.2 million was related to our corporate operations, and $0.6 million was related to our Business Advisory segment. In 2015, we incurred $3.3 million of pretax restructuring expense. This expense primarily consisted of the following charges: Severance - We incurred $2.8 million of severance expense as a result of workforce reductions to better align our resources with market demand. Office exit costs - 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. Of the $3.3 million pretax restructuring expense, $1.2 million was related to our Healthcare segment, $1.1 million was related to our All Other segment as we wound down our public sector consulting practice and our foreign consulting operations based in the Middle East, and $1.0 million was related to our corporate operations. 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, 2017 and 2016.
As of December 31, 2017, our restructuring charge liability related to office space reductions of $4.2 million represented the present value of remaining lease payments, net of estimated sublease income, primarily for our vacated office spaces in Washington, D.C., Houston, Chicago, and San Francisco. This restructuring charge liability is included as a component of accrued expenses and other current liabilities and deferred compensation and other liabilities. All of the $1.3 million restructuring charge liability related to employee costs at December 31, 2017 is expected to be paid in 2018. The restructuring charge liability related to employee costs is included as a component of accrued payroll and related benefits. |
Derivative Instruments and Hedging Activity |
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Derivative Instruments and Hedging Activity | Derivative Instruments and Hedging Activity On April 4, 2013, we entered into a forward amortizing interest rate swap agreement effective March 31, 2014 which ended August 31, 2017. We entered into this derivative instrument to hedge against the interest rate risks of our variable-rate borrowings. The swap had an initial notional amount of $60.0 million and amortized quarterly until April 2016. In April 2016, the notional amount of this interest rate swap increased to $86.0 million and continued to amortize quarterly until it expired in August 2017. Under the terms of the interest rate swap agreement, we received from the counterparty interest on the notional amount based on one-month LIBOR and we paid to the counterparty a fixed rate of 0.985%. On June 22, 2017, we entered into a forward interest rate swap agreement effective August 31, 2017 and ending August 31, 2022, with a notional amount of $50.0 million. We entered into this derivative instrument to continue to hedge against the interest rate risks of our variable-rate borrowings. Under the terms of the interest rate swap agreement, we receive from the counterparty interest on the notional amount based on one-month LIBOR and we pay to the counterparty a fixed rate of 1.900%. We recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet. We have designated these derivative instruments as cash flow hedges. Therefore, changes in the fair value of the derivative instruments are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified into interest expense upon settlement. The ineffective portion of the change in fair value of the derivative instruments is recognized in interest expense. Our interest rate swap agreement was effective during the year ended December 31, 2017. As of December 31, 2017, it was anticipated that less than $0.1 million of the accumulated other comprehensive income, net of tax, currently recorded on our consolidated balance sheet will be reclassified into earnings within the next 12 months. The table below sets forth additional information relating to our interest rate swaps designated as cash flow hedging instruments as of December 31, 2017 and 2016.
All of our derivative instruments are transacted under the International Swaps and Derivatives Association (ISDA) master agreements. These agreements permit the net settlement of amounts owed in the event of default and certain other termination events. Although netting is permitted, it is our policy to record all derivative assets and liabilities on a gross basis on our consolidated balance sheet. We do not use derivative instruments for trading or other speculative purposes. Refer to Note 13 “Other Comprehensive Income (Loss)” for additional information on our derivative instrument. |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain of our assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used in measuring fair value and requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three levels based on the objectivity of the inputs as follows:
The table below sets forth our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016.
Interest rate swaps: The fair values of our interest rate swaps were derived using estimates to settle the interest rate swap agreements, which are based on the net present value of expected future cash flows on each leg of the swaps utilizing market-based inputs and discount rates reflecting the risks involved. Promissory note: As part of the consideration received for the sale of our Accounting Advisory practice on December 30, 2011, we received a $3.5 million promissory note payable over four years. During the fourth quarter of 2017, we amended and restated the note which established scheduled annual principal payments, increased the interest rate, reduced the outstanding principal amount by $0.5 million, and extended the maturity date to September 30, 2020. Additionally, at the closing of this amended promissory note, we received a $1.0 million principal payment. As a result of the amendment, we recorded a $0.3 million fair value remeasurement loss on the promissory note which is recorded in other income (expense), net in the consolidated statement of operations. The scheduled principal payments will be paid to us annually until the maturity date of September 30, 2020, 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 10%, which accounts for the risks associated with the amended note. This fair value measurement is based on significant inputs not observable in the market and thus represent Level 3 inputs. As of December 31, 2017, $0.5 million is recorded in prepaid expenses and other current assets and represents the present value of the payments expected to be received in the next 12 months, and the remaining $0.6 million is recorded in other non-current assets. As of December 31, 2017, there was $1.0 million principal amount outstanding under the promissory note. The table below sets forth the changes in the balance of the promissory note for the years ended December 31, 2017 and 2016.
Convertible debt investment: In 2014 and 2015, we invested $27.9 million, in the form of zero coupon convertible debt, in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight Education, 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. 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 debt security. The investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. We 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. The fair value of the convertible debt investment is recorded in long-term investment. The table below sets forth the changes in the balance of the convertible debt investment for the years ended December 31, 2017 and 2016.
Deferred compensation assets: We have a non-qualified deferred compensation plan (the "Plan") for the members of our board of directors and a select group of our employees. The deferred compensation liability is funded by the Plan assets, which consist of life insurance policies maintained within a trust. The cash surrender value of the life insurance policies approximates fair value, and is based on third-party broker statements which provide the fair value of the life insurance policies' underlying investments, which are Level 2 inputs. The cash surrender value of the life insurance policies is invested primarily in mutual funds. The Plan assets are included in other non-current assets on our consolidated balance sheet. Realized and unrealized gains (losses) from the deferred compensation assets are recorded to other income (expense), net in our consolidated statements of operations. Contingent consideration for business acquisitions: We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted assessment of the specific financial performance targets being achieved or a Monte Carlo simulation model, as appropriate. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 inputs. The significant unobservable inputs used in the fair value measurements of our contingent consideration are our measures of the estimated payouts based on internally generated financial projections on a probability-weighted basis and discount rates, which typically reflect a risk-free rate. The fair value of the contingent consideration is reassessed quarterly based on assumptions used in our latest projections and input provided by practice leaders and management. Any change in the fair value estimate is recorded in our consolidated statement of operations for that period. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of our contingent consideration liability, which would result in different impacts to our consolidated balance sheets and consolidated statements of operations. Actual results may differ from our estimates. Refer to Note 4 “Acquisitions” for information on the acquisitions completed in 2017, 2016, and 2015. The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the years ended December 31, 2017 and 2016.
Financial assets and liabilities not recorded at fair value are as follows: Senior Secured Credit Facility The carrying value of our borrowings outstanding under our senior secured credit facility is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the senior secured credit facility bears interest at variable rates based on current market rates as set forth in the Amended Credit Agreement. Refer to Note 7 “Financing Arrangements” for additional information on our senior secured credit facility. Promissory Note due 2024 The carrying value of our promissory note due 2024 is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the promissory note bears interest at rates based on current market rates as set forth in the terms of the promissory note. Refer to Note 7 “Financing Arrangements” for additional information on our promissory note due 2024. Convertible Notes The carrying amount and estimated fair value of the Convertible Notes are as follows:
The differences between the $250 million principal amount of the Convertible Notes and the carrying amounts shown above represent the unamortized debt discount and issuance costs. As of December 31, 2017 and 2016, the carrying value of the equity component of $39.3 million was unchanged from the date of issuance. Refer to Note 7 “Financing Arrangements” for additional information on our Convertible Notes. The estimated fair value of the Convertible Notes was determined based on the quoted bid price of the Convertible Notes in an over-the-counter market, which is a Level 2 input, on the last day of trading for the quarters ended December 31, 2017 and 2016. Based on the closing price of our common stock of $40.45 on December 31, 2017, the if-converted value of the Convertible Notes was less than the principal amount. Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values of all other financial instruments not described above reasonably approximate fair market value due to the nature of the financial instruments and the short-term maturity of these items. |
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, 2017, 2016, and 2015.
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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 and/or Roth post-tax contributions up to the annual maximums established by the Internal Revenue Service. We match an amount equal to the employees’ contributions up to 6% of the employees’ salaries. Our matching contributions, including those related to our discontinued operations, for the years ended December 31, 2017, 2016, and 2015 were $20.0 million, $19.4 million, and $17.6 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, 2017 and 2016 was $17.7 million and $16.4 million, respectively. This deferred compensation liability is funded by the Plan assets. |
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 replaced, on a prospective basis, our 2004 Omnibus Stock Plan (the "2004 Plan") such that future grants will be granted under the 2012 Plan and any outstanding awards granted under the 2004 Plan that are cancelled, expired, forfeited, settled in cash, or otherwise terminated without a delivery of shares to the participant will not become available for grant under the 2012 Plan. The 2012 Plan permits the grant of stock options, stock appreciation rights, restricted stock, 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 was amended on May 2, 2014 to increase the number of shares authorized for issuance by 850,000 shares. On May 5, 2017, an amendment and restatement of the 2012 Plan was approved by shareholders to increase the number of shares authorized for issuance by 804,000 shares. As of December 31, 2017, approximately 1.3 million shares remain available for issuance under the 2012 Plan. On May 1, 2015, we adopted the Stock Ownership Participation Program (the “SOPP”), which is available to Huron employees below the managing director level who do not receive equity-based awards as part of their normal compensation plan. Under the SOPP, eligible employees may elect to use after-tax payroll deductions, or cash contributions, to purchase shares of the Company’s common stock on certain designated purchase dates. Employees who purchase stock under the SOPP are granted restricted stock equal to 25% of their purchased shares. Vesting of the restricted stock is subject to both a time-based vesting schedule and a requirement that the purchased shares be held for a specified holding period. The initial number of 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, 2017, approximately 0.1 million shares remain available for issuance under the SOPP. It has been our practice to issue shares of common stock upon exercise of stock options and granting of restricted stock from authorized but unissued shares, with the exception of the SOPP under which shares are issued from treasury stock. Certain grants of restricted stock under the 2012 Plan may be issued from treasury stock at the direction of the Compensation Committee. 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 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 Huron 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, 2017, 2016, and 2015 was $14.8 million, $16.6 million, and $19.2 million, respectively, with related income tax benefits of $5.8 million, $6.4 million, and $7.6 million, respectively. As of December 31, 2017, there was $17.6 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 2.2 years. Restricted Stock Awards The grant date fair values of our restricted stock awards are measured based on the fair value of our common stock at grant date and amortized into expense over the service period. Subject to acceleration under certain conditions, the majority of our restricted stock vests annually over four years. The table below summarizes the restricted stock activity for the year ended December 31, 2017.
The aggregate fair value of restricted stock that vested during the years ended December 31, 2017, 2016, and 2015 was $11.1 million, $14.9 million, and $23.9 million, respectively. The weighted average grant date fair value per share of restricted stock granted during 2016 and 2015 was $56.28 and $66.21, respectively. Performance-based Share Awards During 2017, 2016, and 2015, 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 specific 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 one 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, including the performance period. The table below summarizes the performance-based stock activity for the year ended December 31, 2017. All nonvested performance-based stock outstanding at December 31, 2016 and 2017 was granted under the 2012 Omnibus Incentive Plan.
The aggregate fair value of performance-based stock that vested during the years ended December 31, 2017, 2016, and 2015 was $3.6 million, $3.0 million, and $6.5 million, respectively. The weighted average grant date fair value per share of performance-based stock granted during 2016 and 2015 was $55.52 and $66.63, respectively. Stock Options Prior to 2014, the Company granted stock option awards to certain named executive officers. No stock option awards were granted in 2017, 2016, or 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 10-year contractual term. Stock option activity for the year ended December 31, 2017 was as follows:
No options were exercised in 2017. The aggregate intrinsic value of options exercised during 2016 was $0.1 million. No options were exercised in 2015. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“2017 Tax Reform”), a tax reform bill which, among other items, reduces the current corporate federal income tax rate from 35% to 21% and moves from a worldwide tax system to a territorial system. The rate reduction is effective January 1, 2018. As a result of the enactment of the legislation in 2017, we have estimated the remeasurement of our net deferred taxes based on the new lower tax rate, as well as provided for additional one-time income tax expense estimates primarily related to the transition tax on accumulated foreign earnings and elimination of foreign tax credits for dividends that are subject to the 100 percent exemption in our consolidated financial statements as of and for the year ended December 31, 2017. Our provisional analysis resulted in $8.8 million of additional income tax expense for the year ended December 31, 2017. Of the $8.8 million, $7.9 million related to the remeasurement of our deferred tax balances at the lower federal income tax rate; $0.6 million related to the transition tax on accumulated foreign earnings, net of applicable foreign tax credits; and $0.3 million related to withholding tax on outside basis differences due to our change in assertion for permanent reinvestment. The impacts on our financial statements as a result of 2017 Tax Reform are considered provisional and are based on the information that is currently available. These provisional results may be subject to future adjustments as additional analysis is anticipated based on technical corrections and regulatory interpretations to come. We expect to finalize the analysis as soon as practicable, but, in accordance with Staff Accounting Bulletin (“SAB”) No. 118, which was issued as a result of 2017 Tax Reform, not later than one year from the enactment date. Any changes to our provisional analysis will be included as an adjustment to tax expense or benefit in the period the amounts are determined. The income tax expense for continuing operations for the years ended December 31, 2017, 2016, and 2015 consists of the following:
The components of income from continuing operations before taxes were as follows:
A reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations is as follows:
The effective tax rate for discontinued operations in 2017 was 60.0%, based on tax expense of $0.6 million and pretax income from discontinued operations of $1.0 million, and was higher than the statutory tax rate primarily due to the settlement of foreign tax audits. The effective tax rate for discontinued operations in 2016 was (33.4)%, based on tax benefits of $0.9 million and a pretax loss from discontinued operations of $2.8 million, and was lower than the statutory tax rate primarily due to an increase in the valuation allowance for foreign tax credits. The effective tax rate for discontinued operations in 2015 was 169.0%, based on tax expense of $1.8 million and a pretax loss from discontinued operations of $1.1 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 net deferred tax liabilities for continuing operations at December 31, 2017 and 2016 consisted of the following:
As of December 31, 2017 and 2016, we had valuation allowances of $1.2 million and $0.6 million, respectively, primarily due to uncertainties relating to the ability to utilize deferred tax assets recorded for foreign losses. The increase in valuation allowances in 2017 primarily related to increases of net operating losses in jurisdictions where the net operating loss credits cannot be benefited and valuation allowances recorded on certain tax credits. We have federal and state tax credit carry-forwards of $1.9 million which expire in 2022 and 2019, respectively. We have no federal net operating losses or state net operating loss carry-forwards as of December 31, 2017. 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:
As of December 31, 2017, we had $0.8 million of unrecognized tax benefits which would affect the effective tax rate of continuing operations if recognized. As of December 31, 2017 and 2016, we had $0.1 million and $0.3 million accrued for the potential payment of interest and penalties. Accrued interest and penalties are recorded as a component of provision for income taxes on our consolidated statement of earnings. We file income tax returns with federal, state, local and foreign jurisdictions. Tax years 2013 through 2016 are subject to future examinations by federal tax authorities. Tax years 2010 through 2016 are subject to future examinations by state and local tax authorities. Currently, the Company is not under audit by any tax authority. Our foreign income tax filings are subject to future examinations by the local foreign tax authorities for tax years 2010 through 2016. |
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 2028, 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. Rent expense, including operating costs and taxes, for the years ended December 31, 2017, 2016, and 2015 was $14.3 million, $11.5 million, and $12.3 million, respectively. Future minimum rental commitments under non-cancelable leases and sublease income as of December 31, 2017, are as follows:
Litigation From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, we are not a party to any litigation or legal proceeding that, in the current opinion of management, could have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. Guarantees Guarantees in the form of letters of credit totaling $1.9 million and $4.8 million were outstanding at December 31, 2017 and 2016, respectively, primarily to support certain office lease obligations. In connection with certain business acquisitions, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreements. As of December 31, 2017 and 2016, the total estimated fair value of our contingent consideration liabilities was $22.8 million and $8.8 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 Information | Segment Information Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker, who is our chief executive officer, manages the business under three operating segments, which are our reportable segments: Healthcare, Education, and Business Advisory. During the second quarter of 2017, we reorganized our internal financial reporting structure, which management uses to assess performance and allocate resources, by moving our Life Sciences practice from the Education and Life Sciences segment to the Business Advisory segment. The remaining Education and Life Sciences segment is now referred to as the Education segment. While our consolidated results have not been impacted, we have reclassified our historical segment information for consistent presentation.
Our Healthcare segment has a depth of expertise in strategy and innovation, care transformation, financial and operational excellence, technology and analytics, and leadership development. We serve national and regional hospitals and integrated health systems, academic medical centers, community hospitals, and medical groups. Our solutions help clients evolve and adapt to the rapidly changing healthcare environment and achieve growth, optimize performance, enhance profitability, improve quality and clinical outcomes, and drive physician, patient, and employee engagement across the enterprise. We help organizations transform and innovate the delivery model to focus on patient wellness by improving quality outcomes, minimizing care variation and fundamentally improving patient and population health. Our consultants partner with clients to help build and sustain today’s business to invest in the future by reducing complexity, improving operational efficiency and growing market share. We enable the healthcare of the future by identifying, integrating and optimizing technology investments to collect data that transforms care delivery and improves patient outcomes. We also develop future leaders capable of driving meaningful operational and organizational change and who transform the patient experience.
Our Education segment provides management consulting and technology solutions to higher education institutions and academic medical centers. We partner with clients to address challenges relating to business and technology strategy, financial management, operational and organizational effectiveness, research administration, and regulatory compliance. Our institutional strategy, market research, budgeting and financial management, business operations and student lifecycle management solutions align missions with business priorities, improve quality and reduce costs institution-wide. Our technology strategy, enterprise applications, and analytic solutions transform and optimize operations, deliver time and cost savings, and enhance the student experience. Our research enterprise solutions assist clients in identifying and implementing institutional research strategy, optimizing clinical research operations, improving financial management and cost reimbursement, improving service to faculty, and mitigating risk compliance.
Our Business Advisory segment provides services to large and middle market, not-for-profit 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 as well as creditors, equity owners, and other key constituents. Our Business Advisory professionals resolve complex business issues and enhance client enterprise value through a suite of services including capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory. Our Enterprise Solutions and Analytics professionals deliver technology and analytic solutions that enable organizations to manage and optimize their financial performance, operational efficiency, and client or stakeholder experience. Our Strategy and Innovation professionals collaborate with clients across a range of industries to identify new growth opportunities, build new ventures and capabilities, and accelerate organizational change. Our Life Sciences professionals provide strategic solutions to help pharmaceutical, medical device, and biotechnology companies deliver more value to patients, payers, and providers, and comply with regulations. Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include costs for corporate office support, 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 tables below set forth information about our operating segments for the years ended December 31, 2017, 2016, and 2015, 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.
N/M – Not Meaningful N/A – Not Applicable
For the years ended December 31, 2017, 2016, and 2015, substantially all of our revenues and long-lived assets were attributed to or located in the United States. At December 31, 2017 and 2016, no single client accounted for greater than 10% of our combined receivables and unbilled services balances. During the years ended December 31, 2017, 2016, and 2015, no single client generated greater than 10% of our consolidated revenues. |
Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts | Valuation and Qualifying Accounts The table below sets forth the changes in the carrying amount of our allowances for doubtful accounts and unbilled services and valuation allowance for deferred tax assets for the years ended December 31, 2017, 2016, and 2015.
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Selected Quarterly Financial Data (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (Unaudited)
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible Assets Other Than Goodwill Identifiable intangible assets are amortized over their expected useful lives using a method that reflects the economic benefit expected to be derived from the assets or on a straight-line basis. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
Derivatives, Policy [Policy Text Block] | We recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet. We have designated these derivative instruments as cash flow hedges. Therefore, changes in the fair value of the derivative instruments are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified into interest expense upon settlement. The ineffective portion of the change in fair value of the derivative instruments is recognized in interest expense. |
Basis of Presentation and Principles of Consolidation | 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 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. 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. License revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered. Time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include certain speaking engagements, conferences, and 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 provided. In performance-based billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur. We 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. 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 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. When billings do not specifically identify reimbursable expenses, we allocate the portion of the billings equivalent to these expenses to 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. These estimates may differ from actual results. If the financial condition of a client deteriorates in the future, impacting the client’s ability to make payments, an increase to our allowance might be required or our allowance may not be sufficient to cover actual write-offs. We record the provision for doubtful accounts and unbilled services as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. 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 benefits and share-based compensation costs, as well as commissions, the cost of outside consultants or subcontractors assigned to revenue-generating activities, technology costs, other third-party costs directly attributable to our revenue-generating activities, and direct expenses to be reimbursed by clients. 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 | Long-term Investment 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. If the investment is in an unrealized loss position, we assess whether the investment is other than temporarily impaired. We consider impairments to be other than temporary if they are 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. Aircraft are depreciated over ten years. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the initial term of the lease. |
Software Development Costs | Software Development Costs We incur internal and external software development costs related to our cloud computing applications and software for internal use. We capitalize these software development costs incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life. We also incur internal and external software development costs related to our software products that will be sold, leased, or otherwise marketed. We expense these software development costs until technological feasibility has been established. Thereafter and until the software is available for general release to customers, these software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. These capitalized development costs are 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 software development costs 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 and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a significant decline in forecasted operating results over an extended period of time. We evaluate the recoverability of long-lived assets based on forecasted undiscounted cash flows. |
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 six reporting units: Healthcare, Education, Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences. The Business Advisory, Enterprise Solutions and Analytics, Strategy and Innovation, and Life Sciences reporting units make up our 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 for business combinations. Each acquired company’s operating results are included in our consolidated financial statements starting on the date of acquisition. The purchase price is equivalent to the fair value of consideration transferred. 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 tangible and intangible assets acquired and liabilities assumed. Contingent consideration, which is primarily based on the business achieving certain performance targets, is recognized at its fair value on the acquisition date, and changes in fair value are recognized in earnings until settled. |
Deferred Lease Incentives | Deferred Lease Incentives We record the portion of the deferred lease incentive liability that we expect to recognize over a period greater than one year as a non-current liability. The non-current portion of the deferred lease incentive liability totaled $15.3 million and $10.7 million at December 31, 2017 and 2016, 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 a current liability. We monitor the classification of such liabilities based on the expectation of their utilization periods. |
Income Taxes | 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 | Share-Based Compensation Share-based compensation cost is measured based on the grant date fair value of the respective awards. We generally recognize share-based compensation ratably using the straight-line attribution method; however, for those awards with performance criteria and graded vesting features, we use the graded vesting attribution method. It is our policy to account for forfeitures as they occur. |
Sponsorship and Advertising Costs | Sponsorship and Advertising Costs Sponsorship and advertising costs are expensed as incurred. |
Debt Issuance Costs | 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 other non-current assets. Unamortized debt issuance costs attributable to our Convertible Notes are recorded as a deduction from the carrying amount of the debt liability. |
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 income, 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 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 three operating segments, which are reportable segments: Healthcare, Education, and Business Advisory. During the second quarter of 2017, we reorganized our internal financial reporting structure, which management uses to assess performance and allocate resources, by moving our Life Sciences practice from the Education and Life Sciences segment to the Business Advisory segment. The remaining Education and Life Sciences segment is now referred to as the Education segment. While our consolidated results have not been impacted, we have reclassified our historical segment information for consistent presentation. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows entities to reclassify stranded tax effects resulting from the enactment of the 2017 Tax Cuts and Jobs Act ("2017 Tax Reform") from accumulated other comprehensive income to retained earnings. We adopted ASU 2018-02 upon issuance and reclassified $0.5 million of stranded tax effects, primarily related to our convertible debt investment, from accumulated other comprehensive income to retained earnings as of December 31, 2017. Refer to Note 16 "Income Taxes" for additional information on the 2017 Tax Reform. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which required us to determine the implied fair value of goodwill by allocating the reporting unit's fair value to each of its assets and liabilities as if the reporting unit was acquired in a business acquisition. Instead, the updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. We adopted this ASU in the second quarter of 2017 on a prospective basis and applied the new guidance to our interim goodwill impairment tests performed in the second quarter of 2017 and our annual impairment test performed as of November 30, 2017. Refer to Note 5 “Goodwill and Intangible Assets” for additional information on our interim and annual goodwill impairment tests performed. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statement of cash flows, and forfeitures. We adopted this guidance in the first quarter of 2017, at which time we began recognizing excess tax benefits and deficiencies as income tax benefit or expense in our consolidated statements of operations on a prospective basis. We recognized $1.8 million of net excess tax deficiencies as income tax expense in our consolidated statement of operations for the year ended December 31, 2017. Additionally, upon adoption, we began classifying excess tax benefits as an operating activity on the statement of cash flows on a retrospective basis. As a result, we reclassified $0.9 million and $3.6 million of excess tax benefits for the years ended December 31, 2016 and 2015, respectively, from cash flows from financing activities to cash flows from operating activities on our statement of cash flows. We elected to account for share-based award forfeitures as they occur, and applied this accounting change on a modified retrospective basis as a cumulative-effect adjustment to retained earnings of $0.4 million during the first quarter of 2017. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments. ASU 2016-06 clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. We adopted these amendments in the first quarter of 2017 on a modified retrospective basis. The adoption of these amendments did not have any impact on our consolidated financial statements. Not Yet Adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments to the guidance improve and simplify accounting rules for hedge accounting to better present the economic results of an entity’s risk management activities in its financial statements and improve the disclosures of hedging arrangements. Additionally, ASU 2017-12 simplifies the hedge documentation and effectiveness assessment requirements. The updated guidance is effective for us beginning January 1, 2019. We do not expect this guidance to have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC Topic 840, Leases, and sets forth the principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record on the balance sheet a right-of-use asset and a lease liability, equal to the present value of the remaining lease payments, for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or a straight-line basis over the term of the lease. ASU 2016-02 will be effective for us beginning January 1, 2019, with early adoption permitted. Entities are required to use a modified retrospective transition method for existing leases. We are currently evaluating the potential impact this guidance will have on our consolidated financial statements. In January 2016, the FASB issued ASU 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 do not expect this guidance to have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 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 accordance with the new standard, we will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method, under which the new guidance will be applied to the current period presented in the financial statements and a cumulative-effect adjustment will be recorded as of the date of adoption. We are currently completing our analysis to determine the impact of ASC 606 on our consolidated financial statements, and expect the more impactful aspect of ASC 606 will relate to how we recognize revenue under performance-based fee billing arrangements. Currently, we recognize revenue under these arrangements once all related performance criteria are met and the amount to be recognized is fixed or determinable. However, upon adoption of the new standard, we will estimate these amounts and recognize the estimated amounts as services are performed over the contractual term of the engagements. The cumulative-effect adjustment will capture the amount of revenue we would have recognized on all outstanding performance-based fee billing arrangements under ASC 606 as of the adoption date, and record the difference as a cumulative-effect adjustment to retained earnings. Further, ASC 606 provides for certain practical expedients that we intend to use, including the option to expense contract acquisition costs as incurred if the contract term is one year or shorter. We also intend to use the as-invoiced practical expedient, which permits us to recognize revenue in the amount to which we have the right to invoice a customer if that amount corresponds to the value of the performance completed to date. |
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. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used in measuring fair value and requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three levels based on the objectivity of the inputs as follows:
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Income Taxes - (Policies) |
12 Months Ended |
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Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
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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Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The table below summarizes the operating results of Huron Legal for the year ended December 31, 2015.
(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.
The table below summarizes the amounts reflected in our consolidated statements of cash flows that relate to the discontinued operations for the year ended December 31, 2015.
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Acquisitions (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Innosight Holdings, LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Consideration Transferred | The acquisition date fair value of the consideration transferred for Innosight was $113.6 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 preliminary 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 unaudited supplemental pro forma information summarizes the combined results of operations of Huron and Innosight as though the companies were combined on January 1, 2016.
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Studer Group | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Consideration Transferred | 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 unaudited supplemental pro forma information summarizes the combined results of operations for Huron and Studer Group for the twelve months ended December 31, 2015 as though the companies were combined on January 1, 2014.
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2017 and 2016.
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Intangible Assets | Intangible assets as of December 31, 2017 and 2016 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 each of the five succeeding years for the intangible assets recorded as of December 31, 2017.
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Property and Equipment, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, net at December 31, 2017 and 2016 consisted of the following:
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Financing Arrangements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | of the scheduled remaining principal payments of our debt as of December 31, 2017.
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Schedule of Notes | As of December 31, 2017 and 2016, the Convertible Notes consisted of the following:
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Summary of Interest Expense Recognized | The following table presents the amount of interest expense recognized related to the Convertible Notes for the periods presented.
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic and Diluted 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. In periods for which we report a net loss from continuing operations, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss from continuing operations per share would be anti-dilutive. Earnings (loss) per share under the basic and diluted computations are as follows:
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Summary of Anti-dilutive Securities Excluded from Computation of Weighted Average Common Stock Equivalents | The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were as follows:
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Restructuring Charges - (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2017 and 2016.
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Derivative Instruments and Hedging Activity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
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 our interest rate swaps designated as cash flow hedging instruments as of December 31, 2017 and 2016.
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The table below sets forth our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016.
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The carrying amount and estimated fair value of the Convertible Notes are as follows:
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Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below sets forth the changes in the balance of the promissory note for the years ended December 31, 2017 and 2016.
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Convertible Debt Securities [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below sets forth the changes in the balance of the convertible debt investment for the years ended December 31, 2017 and 2016.
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Contingent Consideration Liability [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the years ended December 31, 2017 and 2016.
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Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2017, 2016, and 2015.
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Equity Incentive Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Activity | The table below summarizes the restricted stock activity for the year ended December 31, 2017.
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Schedule of Performance-Based Stock Activity | The table below summarizes the performance-based stock activity for the year ended December 31, 2017. All nonvested performance-based stock outstanding at December 31, 2016 and 2017 was granted under the 2012 Omnibus Incentive Plan.
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Schedule of Stock Option Activity | Stock option activity for the year ended December 31, 2017 was as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense for Continuing Operations | The income tax expense for continuing operations for the years ended December 31, 2017, 2016, and 2015 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 taxes 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, 2017 and 2016 consisted 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, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2017, are as follows:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Segment Information | The tables below set forth information about our operating segments for the years ended December 31, 2017, 2016, and 2015, 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.
N/M – Not Meaningful N/A – Not Applicable |
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Segment Assets |
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Valuation and Qualifying Accounts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Allowances for Doubtful Accounts and Unbilled Services and Valuation Allowance for Deferred Tax Assets | The table below sets forth the changes in the carrying amount of our allowances for doubtful accounts and unbilled services and valuation allowance for deferred tax assets for the years ended December 31, 2017, 2016, and 2015.
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Selected Quarterly Financial Data (unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 |
Dec. 31, 2016 |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Table Text Block] |
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Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Millions |
12 Months Ended | |||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2017 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Excess Tax Benefit from Share-based Compensation, Financing Activities | $ 0.9 | $ 3.6 | ||
Stock-based compensation forfeiture allowance | $ 0.4 | |||
Retained Earnings [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 0.5 | |||
Income Tax Expense [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ (1.8) |
Discontinued Operations - Cash Flows (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Share-based compensation | $ 14,838 | $ 16,577 | $ 21,487 |
Purchases of property and equipment | $ 24,402 | $ 13,936 | 18,571 |
Discontinued operations [Member] | Huron Legal [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Amortization of intangible assets and software development costs | 15,974 | ||
Share-based compensation | 2,215 | ||
Purchases of property and equipment | 6,234 | ||
Significant non-cash investing items of discontinued operations: | |||
Contingent consideration related to business acquisitions | $ 900 |
Acquisitions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 01, 2017 |
Feb. 12, 2015 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Business Acquisition [Line Items] | ||||||||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Reasons | The current fair values of assets acquired and liabilities assumed are considered preliminary and are based on the information that is currently available. We believe that the information provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed, but certain items, such as working capital amounts, may be subject to change as additional information is received. Thus, the provisional measurements of fair value and goodwill are subject to change. We will finalize the valuation in the first quarter of 2018. | |||||||||||||
Share Price | $ 40.45 | $ 40.45 | ||||||||||||
Contingent consideration related to business acquisitions | $ 15,489 | $ 8,754 | $ 15,489 | $ 8,754 | $ 2,963 | |||||||||
Revenues | 185,927 | $ 176,376 | $ 181,418 | $ 188,849 | 178,124 | $ 183,400 | $ 184,259 | $ 180,489 | 732,570 | 726,272 | 699,010 | |||
Operating income (loss) | $ (27,128) | $ 6,098 | (200,575) | 14,149 | $ 8,409 | $ 23,240 | $ 28,209 | $ 14,376 | (207,456) | 74,234 | 103,498 | |||
Amortization of Intangible Assets | 35,000 | 33,100 | 28,700 | |||||||||||
Innosight Holdings, LLC [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Effective date of acquisition | Mar. 01, 2017 | |||||||||||||
Outstanding stock from the existing shareholders | 100.00% | |||||||||||||
Acquisition date fair value of the consideration | $ 113,607 | |||||||||||||
Borrowings under credit facility | $ 89,000 | |||||||||||||
Common stock issued | 221,558 | |||||||||||||
Acquisition date fair value | $ 9,560 | |||||||||||||
Share Price | $ 43.15 | |||||||||||||
Contingent consideration related to business acquisitions | $ 12,050 | |||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 35,000 | |||||||||||||
Weighted-average amortization period | 5 years 7 months | |||||||||||||
Goodwill expected to be deductible for income tax purpose | $ 87,400 | |||||||||||||
Revenues | 34,300 | |||||||||||||
Operating income (loss) | (900) | |||||||||||||
Amortization of Intangible Assets | 3,400 | |||||||||||||
Expenses incurred | $ 300 | $ 1,400 | 1,700 | |||||||||||
Pro Forma Adjustments, Additional Expense | $ 600 | $ 11,400 | ||||||||||||
Studer Group | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Effective date of acquisition | Feb. 12, 2015 | |||||||||||||
Outstanding stock from the existing shareholders | 100.00% | |||||||||||||
Date of acquisition agreement | Jan. 26, 2015 | |||||||||||||
Acquisition date fair value of the consideration | $ 325,186 | |||||||||||||
Borrowings under credit facility | $ 102,000 | |||||||||||||
Common stock issued | 28,486 | |||||||||||||
Acquisition date fair value | $ 2,204 | |||||||||||||
Share Price | $ 77.35 | |||||||||||||
Weighted-average amortization period | 6 years 4 months | |||||||||||||
Goodwill expected to be deductible for income tax purpose | $ 119,500 | |||||||||||||
Revenues | 79,900 | |||||||||||||
Operating income (loss) | 5,100 | |||||||||||||
Amortization of Intangible Assets | 21,300 | |||||||||||||
Expenses incurred | $ 2,100 | 1,200 | $ 900 | |||||||||||
Pro Forma Adjustments, Additional Expense | $ 2,400 |
Acquisitions - Summary of Fair Value of Consideration Transferred (Details) - USD ($) $ in Thousands |
Mar. 01, 2017 |
Feb. 12, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Contingent consideration related to business acquisitions | $ 15,489 | $ 8,754 | $ 2,963 | ||
Innosight Holdings, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 90,725 | ||||
Acquisition date fair value | 9,560 | ||||
Contingent consideration related to business acquisitions | 12,050 | ||||
Consideration transferred net working capital adjustment | 1,272 | ||||
Acquisition date fair value of the consideration | $ 113,607 | ||||
Studer Group | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 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) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Innosight Holdings, LLC [Member] | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Business acquisition, pro forma revenue | $ 741,695 | $ 769,114 | |
Business acquisition, pro forma net income (loss) | $ (167,346) | $ 42,760 | |
Business acquisition, pro forma earnings per share, basic (in USD per share) | $ (7.79) | $ 2.01 | |
Business acquisition, pro forma earnings per share, diluted (in USD per share) | $ (7.79) | $ 1.98 | |
Studer Group | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Business acquisition, pro forma revenue | $ 709,813 | ||
Business acquisition, pro forma net income (loss) | $ 63,600 | ||
Business acquisition, pro forma earnings per share, basic (in USD per share) | $ 2.87 | ||
Business acquisition, pro forma earnings per share, diluted (in USD per share) | $ 2.81 |
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 35,000 | $ 33,100 | $ 28,700 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 23,936 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 17,279 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 12,116 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 8,070 | ||
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 6,092 |
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation expense for property and equipment | $ 13.3 | $ 12.5 | $ 12.3 |
Property and Equipment, Net - Summary of Premises and Equipment (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 115,685 | $ 99,948 |
Accumulated depreciation and amortization | (70,144) | (67,514) |
Property and equipment, net | 45,541 | 32,434 |
Computers, related equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 46,216 | 48,607 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 45,244 | 38,502 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 16,434 | 12,545 |
Assets under Construction [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 250 | 294 |
Aircraft [Domain] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,541 | $ 0 |
Property and equipment, net | $ 6,500 |
Financing Arrangements - Summary of Carrying Amounts of Debt (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term debt | $ 343,008 | $ 292,065 | |
Long-term debt, net of current portion | 342,507 | 292,065 | |
Convertible Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 233,140 | 224,065 | |
Senior Secured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 105,000 | $ 68,000 | |
Promissory Note due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 4,868 | $ 5,100 | |
Long-term Debt, Current Maturities | $ 501 |
Financing Arrangements Financing Arrangements - Summary of Debt Maturities (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 501 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 250,515 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 105,529 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 544 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 559 |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 2,221 |
Financing Arrangements - Schedule of Notes (Detail) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2015 |
Sep. 30, 2014 |
---|---|---|---|---|
Convertible Senior Notes [Line Items] | ||||
Proceeds | $ 250,000,000 | |||
Long-term debt | $ 343,008,000 | $ 292,065,000 | ||
Convertible Debt [Member] | ||||
Convertible Senior Notes [Line Items] | ||||
Proceeds | 250,000,000 | 250,000,000 | $ 250,000,000 | $ 250,000,000 |
Less: debt discount, net of amortization | (14,668,000) | (22,520,000) | ||
Debt Issuance Costs, Net | 2,192,000 | 3,415,000 | ||
Long-term debt | 233,140,000 | 224,065,000 | ||
Equity component | $ 39,287,000 | $ 39,287,000 |
Financing Arrangements - Summary of Interest Expense Recognized (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Interest Expense Recognized [Line Items] | |||
Contractual interest coupon | $ 3,125 | $ 3,125 | $ 3,125 |
Amortization of debt discount | 7,851 | 7,488 | 7,141 |
Amortization of debt issuance costs | 1,224 | 1,201 | 1,180 |
Convertible Debt [Member] | |||
Interest Expense Recognized [Line Items] | |||
Total interest expense recognized | $ 12,200 | $ 11,814 | $ 11,446 |
Capital Structure - Additional Information (Detail) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
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 | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Earnings Per Share Reconciliation [Abstract] | |||||||||||
Net income (loss) from continuing operations | $ (29,310) | $ 4,132 | $ (150,482) | $ 5,155 | $ 4,187 | $ 12,288 | $ 16,139 | $ 6,866 | $ (170,505) | $ 39,480 | $ 61,895 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (302) | 238 | 309 | 143 | (33) | 4 | (970) | (864) | 388 | (1,863) | (2,843) |
Net income (loss) | $ (29,612) | $ 4,370 | $ (150,173) | $ 5,298 | $ 4,154 | $ 12,292 | $ 15,169 | $ 6,002 | $ (170,117) | $ 37,617 | $ 59,052 |
Weighted average common shares outstanding-basic | 21,515 | 21,505 | 21,492 | 21,239 | 21,083 | 21,076 | 21,061 | 21,114 | 21,439 | 21,084 | 22,136 |
Weighted average common stock equivalents | 0 | 340 | 464 | ||||||||
Weighted average common shares outstanding- diluted | 21,515 | 21,622 | 21,492 | 21,474 | 21,473 | 21,445 | 21,376 | 21,460 | 21,439 | 21,424 | 22,600 |
Net earnings per basic share: | |||||||||||
Net income from continuing operations, per basic share (in USD per share) | $ (1.36) | $ 0.19 | $ (7.00) | $ 0.24 | $ 0.20 | $ 0.58 | $ 0.77 | $ 0.33 | $ (7.95) | $ 1.87 | $ 2.80 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | (0.02) | 0.01 | 0.01 | 0.01 | 0.00 | 0.00 | (0.05) | (0.05) | 0.02 | (0.09) | (0.13) |
Net income, per basic share (in USD per share) | (1.38) | 0.20 | (6.99) | 0.25 | 0.20 | 0.58 | 0.72 | 0.28 | (7.93) | 1.78 | 2.67 |
Net earnings per diluted share: | |||||||||||
Net income from continuing operations, per diluted share (in USD per share) | (1.36) | 0.19 | (7.00) | 0.24 | 0.19 | 0.57 | 0.76 | 0.32 | (7.95) | 1.84 | 2.74 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | (0.02) | 0.01 | 0.01 | 0.01 | 0.00 | 0.00 | (0.05) | (0.04) | 0.02 | (0.08) | (0.13) |
Net income, per diluted share (in USD per share) | $ (1.38) | $ 0.20 | $ (6.99) | $ 0.25 | $ 0.19 | $ 0.57 | $ 0.71 | $ 0.28 | $ (7.93) | $ 1.76 | $ 2.61 |
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, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 7,088 | 6,260 | 6,279 |
Restricted Stock Awards [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 636 | 2 | 21 |
Employee Stock Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 194 | 0 | 0 |
Convertible Debt Securities [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 3,129 | 3,129 | 3,129 |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total anti-dilutive securities | 3,129 | 3,129 | 3,129 |
Earnings Per Share - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2017 |
|
Accelerated Share Repurchases [Line Items] | |||
Stock Repurchased and Retired During Period, Value | $ 55,265,000 | $ 34,591,000 | |
Share Repurchase Program [Member] | |||
Accelerated Share Repurchases [Line Items] | |||
Share repurchase authorized amount | $ 125,000,000.0 | ||
Shares repurchased | 982,192 | 583,880 | |
Stock Repurchased and Retired During Period, Value | $ 55,300,000 | $ 34,600,000 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 35,100,000 |
Derivative Instruments and Hedging Activity - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jun. 22, 2017 |
Apr. 04, 2013 |
Dec. 31, 2017 |
Apr. 30, 2016 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Interest rate swap agreement, effective date | Aug. 31, 2017 | Mar. 31, 2014 | ||
Interest rate swap agreement, end date | Aug. 31, 2022 | Aug. 31, 2017 | ||
Interest rate swap agreement for a notional amount | $ 50,000,000.0 | $ 60,000,000.0 | $ 86,000,000 | |
Duration of LIBOR | 1 month | 1 month | ||
Percentage of fixed rate | 1.90% | 0.985% | ||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 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, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Noncurrent Assets [Member] | ||
Fair Value interest rate swaps designated as cash flow hedging instruments | ||
Fair value (derivative asset and liability) | $ 581 | $ 0 |
Accrued expenses [Member] | ||
Fair Value interest rate swaps designated as cash flow hedging instruments | ||
Fair value (derivative asset and liability) | $ 48 | $ 54 |
Fair Value of Financial Instruments - Summary of Carrying Amount and Estimated Fair Value of Convertible Notes (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 343,008 | $ 292,065 |
Convertible Debt [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 233,140 | 224,065 |
Estimated fair value | $ 232,578 | $ 245,018 |
Other Comprehensive Income (Loss) Other Comprehensive Income (Loss) - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Tax | $ 0 | $ 0 | $ 0 |
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | 998 | (59) | 2,709 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 106 | (122) | (327) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | $ 46 | $ 161 | $ 320 |
Employee Benefit and Deferred Compensation Plans - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Postemployment Benefits [Abstract] | |||
Employer contributions up to percent of employee's salaries | 6.00% | ||
Employer matching contributions | $ 20.0 | $ 19.4 | $ 17.6 |
Deferred compensation liability | $ 17.7 | $ 16.4 |
Equity Incentive Plans - Schedule of Stock Activity (Additional Information) (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restricted Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested performance-based shares outstanding | 574,000 | 622,000 | ||
Forfeited, number of shares | (76,000) | |||
Aggregate fair value of stock vested | $ 11.1 | $ 14.9 | $ 23.9 | |
Performance-based stock activity [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested performance-based shares outstanding | 353,000 | 239,000 | ||
Nonvested And Unearned Performance Shares | 316,000 | |||
Forfeited, number of shares | (129,000) | |||
Aggregate fair value of stock vested | $ 3.6 | $ 3.0 | $ 6.5 | |
Performance-based stock activity [Member] | Scenario, Forecast [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Forfeited, number of shares | (235,000) |
Income Taxes - Income Tax Expense for Continuing Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current: | |||
Federal | $ (635) | $ 15,726 | $ 4,806 |
State | 545 | 1,623 | 2,380 |
Foreign | 2,040 | 1,021 | 350 |
Total current | 1,950 | 18,370 | 7,536 |
Deferred: | |||
Federal | (46,103) | 1,662 | 12,450 |
State | (6,576) | (274) | 1,482 |
Foreign | (1,270) | (81) | 202 |
Total deferred | (53,949) | 1,307 | 14,134 |
Income tax expense for continuing operations | $ (51,999) | $ 19,677 | $ 21,670 |
Income Taxes - Components of Income from Continuing Operations Before Income Tax Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ (221,137) | $ 56,141 | $ 85,164 |
Foreign | (1,367) | 3,016 | (1,599) |
Income (loss) from continuing operations before taxes | $ (222,504) | $ 59,157 | $ 83,565 |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 3,340 | $ 3,223 | $ 2,488 |
Decrease based on tax positions related to the prior year | (117) | ||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | (2,410) | ||
Additions based on tax positions related to the current year | 117 | 735 | |
Unrecognized tax benefits, ending balance | $ 813 | $ 3,340 | $ 3,223 |
Segment Information - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2017
Segment
| |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |
Segment Information - Segment Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Segment Assets: | |||
Total assets | $ 1,036,928 | $ 1,153,215 | $ 1,159,543 |
Segment Reconciling Items [Member] | |||
Segment Assets: | |||
Total assets | 877,247 | 1,007,696 | 1,017,654 |
Health Care [Member] | Operating Segments [Member] | |||
Segment Assets: | |||
Total assets | 70,097 | 69,274 | 84,088 |
Education [Member] | Operating Segments [Member] | |||
Segment Assets: | |||
Total assets | 31,367 | 33,094 | 28,192 |
Business Advisory [Member] | Operating Segments [Member] | |||
Segment Assets: | |||
Total assets | $ 58,217 | $ 43,151 | $ 29,609 |
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, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Allowances for doubtful accounts and unbilled services [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | $ 21,259 | $ 16,886 | $ 14,129 |
Additions | 43,888 | 48,901 | 40,003 |
Deductions | 40,648 | 44,528 | 37,246 |
Ending balance | 24,499 | 21,259 | 16,886 |
Valuation allowance for deferred tax assets [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | 626 | 2,242 | 2,431 |
Additions | 793 | 113 | 1,212 |
Deductions | 172 | 1,729 | 1,401 |
Ending balance | $ 1,247 | $ 626 | $ 2,242 |
Selected Quarterly Financial Data (unaudited) - Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 185,927 | $ 176,376 | $ 181,418 | $ 188,849 | $ 178,124 | $ 183,400 | $ 184,259 | $ 180,489 | $ 732,570 | $ 726,272 | $ 699,010 |
Reimbursable expenses | 19,313 | 17,982 | 20,930 | 16,950 | 17,076 | 19,093 | 18,982 | 16,561 | 75,175 | 71,712 | 70,013 |
Total revenues and reimbursable expenses | 205,240 | 194,358 | 202,348 | 205,799 | 195,200 | 202,493 | 203,241 | 197,050 | 807,745 | 797,984 | 769,023 |
Gross profit | 71,540 | 59,847 | 64,981 | 70,203 | 60,090 | 71,131 | 77,138 | 65,180 | |||
Operating income (loss) | (27,128) | 6,098 | (200,575) | 14,149 | 8,409 | 23,240 | 28,209 | 14,376 | (207,456) | 74,234 | 103,498 |
Net income (loss) from continuing operations | (29,310) | 4,132 | (150,482) | 5,155 | 4,187 | 12,288 | 16,139 | 6,866 | (170,505) | 39,480 | 61,895 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (302) | 238 | 309 | 143 | (33) | 4 | (970) | (864) | 388 | (1,863) | (2,843) |
Net income (loss) | $ (29,612) | $ 4,370 | $ (150,173) | $ 5,298 | $ 4,154 | $ 12,292 | $ 15,169 | $ 6,002 | $ (170,117) | $ 37,617 | $ 59,052 |
Net earnings per basic share: | |||||||||||
Net income from continuing operations, per basic share (in USD per share) | $ (1.36) | $ 0.19 | $ (7.00) | $ 0.24 | $ 0.20 | $ 0.58 | $ 0.77 | $ 0.33 | $ (7.95) | $ 1.87 | $ 2.80 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | (0.02) | 0.01 | 0.01 | 0.01 | 0.00 | 0.00 | (0.05) | (0.05) | 0.02 | (0.09) | (0.13) |
Net income, per basic share (in USD per share) | (1.38) | 0.20 | (6.99) | 0.25 | 0.20 | 0.58 | 0.72 | 0.28 | (7.93) | 1.78 | 2.67 |
Net earnings per diluted share: | |||||||||||
Net income from continuing operations, per diluted share (in USD per share) | (1.36) | 0.19 | (7.00) | 0.24 | 0.19 | 0.57 | 0.76 | 0.32 | (7.95) | 1.84 | 2.74 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | (0.02) | 0.01 | 0.01 | 0.01 | 0.00 | 0.00 | (0.05) | (0.04) | 0.02 | (0.08) | (0.13) |
Net income, per diluted share (in USD per share) | $ (1.38) | $ 0.20 | $ (6.99) | $ 0.25 | $ 0.19 | $ 0.57 | $ 0.71 | $ 0.28 | $ (7.93) | $ 1.76 | $ 2.61 |
Weighted average shares used in calculating earnings per share: | |||||||||||
Basic (shares) | 21,515 | 21,505 | 21,492 | 21,239 | 21,083 | 21,076 | 21,061 | 21,114 | 21,439 | 21,084 | 22,136 |
Diluted (shares) | 21,515 | 21,622 | 21,492 | 21,474 | 21,473 | 21,445 | 21,376 | 21,460 | 21,439 | 21,424 | 22,600 |
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