HURN Huron Consulting Group Inc

FOURTH QUARTER 2017 HIGHLIGHTS

• Revenues increased 4.4% to $185.9 million in Q4 2017 compared to $178.1 million in Q4 2016.
• Net loss from continuing operations, which includes a non-cash pre-tax goodwill impairment charge of $45.0 million related to the company's Business Advisory segment, was $29.3 million in Q4 2017 compared to net income from continuing operations of $4.2 million in Q4 2016.
• Adjusted EBITDA(6), a non-GAAP measure, was $31.5 million in Q4 2017 compared to $23.9 million in Q4 2016.
• Diluted loss per share from continuing operations was $1.36 in Q4 2017 compared to diluted earnings per share from continuing operations of $0.19 in Q4 2016.
• Adjusted diluted earnings per share from continuing operations(6), a non-GAAP measure, was $0.68 in Q4 2017 compared to $0.58 in Q4 2016.

FULL YEAR 2017 HIGHLIGHTS AND 2018 GUIDANCE

• Revenues for full year 2017 increased 0.9% to $732.6 million compared to $726.3 million for full year 2016.
• Net loss from continuing operations for full year 2017, which includes non-cash pretax goodwill impairment charges of $253.1 million related to the company's Healthcare and Business Advisory segments, was $170.5 million, compared to net income from continuing operations of $39.5 million for full year 2016.
• Adjusted EBITDA(6) for full year 2017 was $104.6 million compared to $129.7 million for full year 2016.
• Diluted loss per share from continuing operations was $7.95 for full year 2017 compared to diluted earnings per share from continuing operations of $1.84 for full year 2016.
• Adjusted diluted earnings per share from continuing operations(6) was $2.15 for full year 2017 compared to $3.21 for full year 2016.
• Huron provides full year 2018 earnings guidance, including revenue expectations in a range of $720.0 million to $760.0 million.

Global professional services firm Huron (NASDAQ: HURN) today announced financial results from continuing operations for the fourth quarter and full year ended Dec. 31, 2017.

“Our fourth quarter results were slightly below our expectations, with mixed results across segments. We have made significant progress in the operational turnaround of our Healthcare business, growing segment revenues 20% sequentially in the fourth quarter,” said James H. Roth, chief executive officer and president of Huron. “The Education segment performed well throughout the year and finished the fourth quarter consistent with our expectations. The Business Advisory segment had a softer fourth quarter, but we believe they are positioned for growth in 2018.”

“While we are encouraged by the strengthening in demand in the healthcare market in the fourth quarter, we remain cautious about predicting our performance in 2018. Nevertheless, I am confident in our strategic direction and believe we have repositioned our company to return to sustainable organic growth in the years ahead,” added Roth.

FOURTH QUARTER 2017 RESULTS FROM CONTINUING OPERATIONS

Revenues increased 4.4% to $185.9 million for the fourth quarter of 2017 compared to $178.1 million for the fourth quarter of 2016. Fourth quarter 2017 revenues included $9.8 million from Huron's 2017 acquisitions of Innosight Holdings, LLC (Innosight) and Pope Woodhead and Associates Limited (Pope Woodhead). Fourth quarter 2017 revenues also included revenues from Huron's 2017 acquisition of the international assets of ADI Strategies, which has since been fully integrated into the Business Advisory segment.

Net loss from continuing operations was $29.3 million for the fourth quarter of 2017 compared to net income from continuing operations of $4.2 million for the same period last year. Fourth quarter 2017 results reflect a non-cash pretax charge of $45.0 million to reduce the carrying value of goodwill in the company's Business Advisory segment. The impairment charge is non-cash in nature and does not affect the company's liquidity or debt covenants. Diluted loss per share from continuing operations was $1.36 for the fourth quarter of 2017, compared to diluted earnings per share from continuing operations of $0.19 for the fourth quarter of 2016.

Fourth quarter 2017 loss before interest, taxes, depreciation and amortization ("EBITDA")(6) was $14.6 million, compared to earnings before interest, taxes, depreciation and amortization of $20.7 million in the same period last year.

In addition to using EBITDA to evaluate the company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

    Three Months Ended December 31, 2017     2016 Amortization of intangible assets $ 8,595 $ 8,739 Restructuring charges $ 951 $ 5,463 Other losses (gains), net $ 1,333 $ (2,484 ) Goodwill impairment charges $ 43,493 $ — Non-cash interest on convertible notes $ 1,998 $ 1,906 Other non-operating expense $ 235 $ — Foreign currency transaction losses $ 15 $ 259 Tax effect $

(21,195

) $ (5,354 ) Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017 $

8,762

$ — Tax benefit related to "check-the-box" election $ 20 $ —  

The company has excluded the impact of the Tax Cuts and Jobs Act of 2017, which was enacted in the fourth quarter of 2017, to permit comparability with prior periods.

Adjusted EBITDA(6) was $31.5 million, or 16.9% of revenues, in the fourth quarter of 2017, compared to $23.9 million, or 13.4% of revenues, in the same quarter last year. Adjusted net income from continuing operations(6) was $14.9 million, or $0.68 per diluted share, for the fourth quarter of 2017, compared to $12.5 million, or $0.58 per diluted share, for the same period in 2016.

The average number of full-time billable consultants(2) increased 7.1% to 2,140 in the fourth quarter of 2017 compared to 1,998 in the same quarter last year. Full-time billable consultant utilization rate(3) was 74.2% during the fourth quarter of 2017 compared to 72.2% during the same period last year. Average billing rate per hour for full-time billable consultants(4) was $205 for the fourth quarter of 2017 compared to $209 for the fourth quarter of 2016. The average number of full-time equivalent professionals(5) was 256 in the fourth quarter of 2017 compared to 277 for the same period in 2016.

FULL YEAR 2017 RESULTS FROM CONTINUING OPERATIONS

Revenues increased 0.9% to $732.6 million for full year 2017 compared to $726.3 million for full year 2016. 2017 revenues included $43.9 million from Huron's 2017 acquisitions of Innosight and Pope Woodhead, and $13.9 million of incremental revenues due to the full period impact of the acquisitions of MyRounding Solutions, LLC, and HSM Consulting, which were completed in Feb. 2016 and Aug. 2016, respectively. Revenues for full year 2017 also included a full period impact of Huron's acquisition of the U.S. assets of ADI Strategies and revenues from the acquisition of the international assets of ADI Strategies. These acquisitions were completed in May 2016 and Apr. 2017, respectively, and have been fully integrated into the Business Advisory segment.

Net loss from continuing operations was $170.5 million for full year 2017 compared to net income from continuing operations of $39.5 million for full year 2016. Results for full year 2017 reflect non-cash pretax goodwill impairment charges of $253.1 million related to the company's Healthcare and Business Advisory segments. The impairment charges are non-cash in nature and do not affect the company's liquidity or debt covenants. Diluted loss per share from continuing operations was $7.95 for the full year 2017, compared to diluted earnings per share from continuing operations of $1.84 for full year 2016.

Loss before interest, taxes, depreciation, and amortization(6) for the full year 2017 was $154.7 million, compared to EBITDA of $122.1 million for full year 2016.

In addition to using EBITDA to evaluate the company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

    Twelve Months Ended December 31, 2017     2016 Amortization of intangible assets $ 35,027 $ 33,108 Restructuring charges $ 6,246 $ 9,592 Other losses (gains), net $ 1,111 $ (1,990 ) Goodwill impairment charges $ 253,093 $ — Non-cash interest on convertible notes $ 7,851 $ 7,488 Other non-operating expense (income) $ (696 ) $ — Foreign currency transaction gains, net $ (434 ) $ (11 ) Tax effect $

(91,557

) $ (18,942 ) 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 ) $ —  

The company has excluded the effect of a $2.7 million tax benefit, recorded in the third quarter of 2017, from recognizing a previously unrecognized tax benefit from a "check-the-box" election made in 2014 to treat one of the company's wholly-owned foreign subsidiaries as a disregarded entity for U.S. federal income tax purposes.

The company has also excluded the impact of the Tax Cuts and Jobs Act of 2017, which was enacted in the fourth quarter of 2017, to permit comparability with prior periods.

Adjusted EBITDA(6) was $104.6 million, or 14.3% of revenues, for the full year of 2017, compared to $129.7 million, or 17.9% of revenues, for the full year 2016. Adjusted net income from continuing operations(6) was $46.6 million, or $2.15 per diluted share, for the full year 2017, compared to $68.7 million, or $3.21 per diluted share, for the full year 2016.

The average number of full-time billable consultants(2) increased 6.5% to 2,045 for the full year 2017 compared to 1,921 in the same period last year. Full-time billable consultant utilization rate(3) was 74.5% for the full year 2017 compared to 74.6% during the same period last year. Average billing rate per hour for full-time billable consultants(4) was $203 for the full year 2017 compared to $212 for the full year 2016. The average number of full-time equivalent professionals(5) was 268 for full year 2017 compared to 261 for the full year 2016.

OPERATING SEGMENTS

Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.

The company’s full year 2017 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (49%); Education (23%); and Business Advisory (28%). Financial results by segment are included in the attached schedules and in Huron's forthcoming Annual Report on Form 10-K filing for the year ended Dec. 31, 2017.

OUTLOOK FOR 2018(8)

Based on currently available information, the company provided guidance for full year 2018 of revenues before reimbursable expenses in a range of $720.0 million to $760.0 million. The company anticipates net income in a range of $23.0 million to $29.5 million, and both EBITDA and adjusted EBITDA in a range of $86.5 million to $98.5 million. GAAP diluted earnings per share is expected in a range of $1.05 to $1.35, and non-GAAP adjusted diluted earnings per share is expected in a range of $2.10 to $2.40.

Management will provide a more detailed discussion of its outlook during the company’s earnings conference call webcast.

FOURTH QUARTER 2017 WEBCAST

The company will host a webcast to discuss its financial results today, Feb. 27, 2018, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). The conference call is being webcast by NASDAQ and can be accessed at Huron's website at http://ir.huronconsultinggroup.com. A replay will be available approximately two hours after the conclusion of the webcast and for 90 days thereafter.

USE OF NON-GAAP FINANCIAL MEASURES(6)

In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income (loss) from continuing operations, and adjusted diluted earnings (loss) per share from continuing operations, which are non-GAAP measures. Management uses these non-GAAP financial measures to gain an understanding of the company's comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect the company's ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing their business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. Management believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States.

ABOUT HURON

Huron is a global professional services firm committed to achieving sustainable results in partnership with its clients. The company brings 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. Through focus, passion and collaboration, Huron provides guidance to support organizations as they contend with the change transforming their industries and businesses. Learn more at www.huronconsultinggroup.com.

Statements in this press release that are not historical in nature, including those concerning the company’s current expectations about its future requirements and needs, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “may,” “should,” “expects,” “provides,” “anticipates,” “assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,” “seeks,” “would,” “believes,” “estimates,” “plans,” “continues,” or “outlook” or similar expressions. These forward-looking statements reflect the company's current expectations about future requirements and needs, results, levels of activity, performance, or achievements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: failure to achieve expected utilization rates, billing rates and the number of revenue-generating professionals; inability to expand or adjust our service offerings in response to market demands; our dependence on renewal of client-based services; dependence on new business and retention of current clients and qualified personnel; failure to maintain third-party provider relationships and strategic alliances; inability to license technology to and from third parties; the impairment of goodwill; various factors related to income and other taxes; difficulties in successfully integrating the businesses we acquire and achieving expected benefits from such acquisitions; risks relating to privacy, information security, and related laws and standards; and a general downturn in market conditions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including, among others, those described under “Item 1A. Risk Factors” in Huron's forthcoming Annual Report on Form 10-K for the year ended December 31, 2017, that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. The company disclaims any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.

  HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (In thousands, except per share amounts) (Unaudited)         Three Months Ended Twelve Months Ended December 31, December 31, 2017   2016 2017   2016 Revenues and reimbursable expenses: Revenues $ 185,927 $ 178,124 $ 732,570 $ 726,272 Reimbursable expenses 19,313   17,076   75,175   71,712   Total revenues and reimbursable expenses 205,240 195,200 807,745 797,984 Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): Direct costs 111,621 114,246 454,806 437,556 Amortization of intangible assets and software development costs 2,544 3,862 10,932 15,140 Reimbursable expenses 19,535   17,002   75,436   71,749   Total direct costs and reimbursable expenses 133,700   135,110   541,174   524,445   Operating expenses and other losses (gains), net: Selling, general and administrative expenses 43,227 40,267 175,364 160,204 Restructuring charges 951 5,463 6,246 9,592 Other losses (gains), net 1,333 (2,484 ) 1,111 (1,990 ) Depreciation and amortization 9,664 8,435 38,213 31,499 Goodwill impairment charges 43,493   —   253,093   —   Total operating expenses and other losses (gains), net 98,668   51,681   474,027   199,305   Operating income (loss) (27,128 ) 8,409 (207,456 ) 74,234 Other income (expense), net: Interest expense, net of interest income (4,802 ) (4,004 ) (18,613 ) (16,274 ) Other income, net 361   (39 ) 3,565   1,197   Total other expense, net (4,441 ) (4,043 ) (15,048 ) (15,077 ) Income (loss) from continuing operations before taxes (31,569 ) 4,366 (222,504 ) 59,157 Income tax expense (benefit) (2,259 ) 179   (51,999 ) 19,677   Net income (loss) from continuing operations (29,310 ) 4,187 (170,505 ) 39,480 Income (loss) from discontinued operations, net of tax (302 ) (33 ) 388   (1,863 ) Net income (loss) $ (29,612 ) $ 4,154   $ (170,117 ) $ 37,617   Net earnings (loss) per basic share: Net income (loss) from continuing operations $ (1.36 ) $ 0.20 $ (7.95 ) $ 1.87 Income (loss) from discontinued operations, net of tax (0.02 ) —   0.02   (0.09 ) Net income (loss) $ (1.38 ) $ 0.20   $ (7.93 ) $ 1.78   Net earnings (loss) per diluted share: Net income (loss) from continuing operations $ (1.36 ) $ 0.19 $ (7.95 ) $ 1.84 Income (loss) from discontinued operations, net of tax (0.02 ) —   0.02   (0.08 ) Net income (loss) $ (1.38 ) $ 0.19   $ (7.93 ) $ 1.76   Weighted average shares used in calculating earnings per share: Basic 21,515 21,083 21,439 21,084 Diluted 21,515 21,473 21,439 21,424 Comprehensive income (loss): Net income (loss) $ (29,612 ) $ 4,154 $ (170,117 ) $ 37,617 Foreign currency translation adjustments, net of tax (233 ) 12 1,602 64 Unrealized (gain) loss on investment, net of tax 6,393 1,066 4,724 (97 ) Unrealized gain on cash flow hedging instruments, net of tax 433   90   429   63   Other comprehensive income 6,593   1,168   6,755   30   Comprehensive income (loss) $ (23,019 ) $ 5,322   $ (163,362 ) $ 37,647       HURON CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited)         December 31, December 31, 2017 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         HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)   Twelve Months Ended December 31, 2017     2016 Cash flows from operating activities: Net income (loss) $ (170,117 ) $ 37,617 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 50,089 46,816 Share-based compensation 14,838 16,577 Amortization of debt discount and issuance costs 10,203 9,609 Goodwill impairment charge 253,093 — Allowances for doubtful accounts and unbilled services 3,217 4,250 Deferred income taxes (53,753 ) 1,189 Gain on sale of business (931 ) — Change in fair value of contingent consideration liabilities 1,111 (1,990 ) Changes in operating assets and liabilities, net of acquisitions: (Increase) decrease in receivables from clients 1,650 1,440 (Increase) decrease in unbilled services (4,332 ) 2,443 (Increase) decrease in current income tax receivable / payable, net 210 (4,410 ) (Increase) decrease in other assets (366 ) 11,904 Increase (decrease) in accounts payable and accrued liabilities 3,732 (3,144 ) Increase (decrease) in accrued payroll and related benefits (10,966 ) 3,044 Increase (decrease) in deferred revenues 2,117   3,898   Net cash provided by operating activities 99,795   129,243   Cash flows from investing activities: Purchases of property and equipment, net (24,402 ) (13,936 ) Investment in life insurance policies (1,826 ) (2,035 ) Distributions from life insurance policies 2,889 — Purchases of businesses, net of cash acquired (106,915 ) (69,133 ) Capitalization of internally developed software costs (1,370 ) (1,086 ) Proceeds from note receivable 1,177 — Proceeds from sale of business 1,499   (446 ) Net cash used in investing activities (128,948 ) (86,636 ) Cash flows from financing activities: Proceeds from exercise of stock options — 123 Shares redeemed for employee tax withholdings (4,846 ) (4,953 ) Share repurchases — (55,265 ) Proceeds from borrowings under credit facility 277,500 200,000 Repayments of debt (240,745 ) (224,000 ) Payments for debt issuance costs (408 ) — Payment of contingent consideration liabilities (2,680 ) —   Net cash provided by (used in) financing activities 28,821   (84,095 ) Effect of exchange rate changes on cash 214 78 Net decrease in cash and cash equivalents (118 ) (41,410 ) Cash and cash equivalents at beginning of the period 17,027   58,437   Cash and cash equivalents at end of the period $ 16,909   $ 17,027             HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (Unaudited)   Three Months EndedDecember 31, Percent

Increase

(Decrease)

Segment and Consolidated Operating Results (in thousands): 2017     2016 Healthcare: Revenues $ 95,648 $ 101,381 (5.7 )% Operating income $ 35,181 $ 28,674 22.7 % Segment operating income as a percentage of segment revenues 36.8 % 28.3 % Education: Revenues $ 40,279 $ 38,001 6.0 % Operating income $ 8,546 $ 6,836 25.0 % Segment operating income as a percentage of segment revenues 21.2 % 18.0 % Business Advisory: Revenues $ 50,000 $ 38,742 29.1 % Operating income $ 11,710 $ 6,107 91.7 % Segment operating income as a percentage of segment revenues 23.4 % 15.8 % Total Company: Revenues $ 185,927 $ 178,124 4.4 % Reimbursable expenses 19,313   17,076   13.1 % Total revenues and reimbursable expenses $ 205,240   $ 195,200   5.1 % Statements of Operations reconciliation: Segment operating income $ 55,437 $ 41,617 33.2 % Items not allocated at the segment level: Other operating expenses 28,075 27,257 3.0 % Other losses (gains), net 1,333 (2,484 ) (153.7 )% Depreciation and amortization 9,664 8,435 14.6 % Goodwill impairment charge (1) 43,493   —   N/M Total operating income (loss) (27,128 ) 8,409 N/M Other expense, net 4,441   4,043   9.8 % Income (loss) from continuing operations before taxes $ (31,569 ) $ 4,366   N/M Other Operating Data: Number of full-time billable consultants (at period end) (2): Healthcare 778 888 (12.4 )% Education 549 468 17.3 % Business Advisory 809   547   47.9 % Total 2,136 1,903 12.2 % Average number of full-time billable consultants (for the period) (2): Healthcare 769 976 Education 543 470 Business Advisory 828   552   Total 2,140 1,998       HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)   Three Months Ended December 31, Other Operating Data (continued): 2017     2016 Full-time billable consultant utilization rate (3): Healthcare 84.5 % 72.4 % Education 70.6 % 68.7 % Business Advisory 67.2 % 74.9 % Total 74.2 % 72.2 % Full-time billable consultant average billing rate per hour (4): Healthcare $ 222 $ 215 Education $ 207 $ 225 Business Advisory $ 185 $ 188 Total $ 205 $ 209 Revenue per full-time billable consultant (in thousands): Healthcare $ 84 $ 69 Education $ 65 $ 69 Business Advisory $ 58 $ 65 Total $ 69 $ 68 Average number of full-time equivalents (for the period) (5): Healthcare 207 212 Education 32 41 Business Advisory 17   24   Total 256 277 Revenue per full-time equivalent (in thousands): Healthcare $ 149 $ 158 Education $ 146 $ 137 Business Advisory $ 125 $ 116 Total $ 147 $ 151           HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)   Twelve Months EndedDecember 31, Percent

Increase

(Decrease)

Segment and Consolidated Operating Results (in thousands): 2017     2016 Healthcare: Revenues $ 356,909 $ 424,912 (16.0 )% Operating income $ 118,761 $ 147,903 (19.7 )% Segment operating income as a percentage of segment revenues 33.3 % 34.8 % Education: Revenues $ 167,908 $ 149,817 12.1 % Operating income $ 40,318 $ 38,310 5.2 % Segment operating income as a percentage of segment revenues 24.0 % 25.6 % Business Advisory: Revenues $ 207,753 $ 151,543 37.1 % Operating income $ 46,600 $ 29,382 58.6 % Segment operating income as a percentage of segment revenues 22.4 % 19.4 % Total Company: Revenues $ 732,570 $ 726,272 0.9 % Reimbursable expenses 75,175   71,712   4.8 % Total revenues and reimbursable expenses $ 807,745   $ 797,984   1.2 % Statements of Operations reconciliation: Segment operating income $ 205,679 $ 215,595 (4.6 )% Items not allocated at the segment level: Other operating expenses 120,718 111,852 7.9 % Other losses (gains), net 1,111 (1,990 ) N/M Depreciation and amortization expense 38,213 31,499 21.3 % Goodwill impairment charge (1) 253,093   —   N/M Total operating income (loss) (207,456 ) 74,234 N/M Other expense, net 15,048   15,077   (0.2 )% Income (loss) from continuing operations before taxes $ (222,504 ) $ 59,157   N/M Other Operating Data: Number of full-time billable consultants (at period end) (2): Healthcare 778 888 (12.4 )% Education 549 468 17.3 % Business Advisory 809   547   47.9 % Total 2,136 1,903 12.2 % Average number of full-time billable consultants (for the period) (2): Healthcare 796 998 Education 509 437 Business Advisory 740   486   Total 2,045 1,921       HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)   Twelve Months Ended December 31, Other Operating Data (continued): 2017     2016 Full-time billable consultant utilization rate (3): Healthcare 78.4 % 77.1 % Education 72.8 % 70.6 % Business Advisory 71.7 % 73.1 % Total 74.5 % 74.6 % Full-time billable consultant average billing rate per hour (4): Healthcare $ 206 $ 210 Education $ 213 $ 219 Business Advisory $ 193 $ 208 Total $ 203 $ 212 Revenue per full-time billable consultant (in thousands): Healthcare $ 295 $ 300 Education $ 291 $ 293 Business Advisory $ 268 $ 293 Total $ 284 $ 297 Average number of full-time equivalents (for the period) (5): Healthcare 213 203 Education 35 38 Business Advisory 20   20   Total 268 261 Revenue per full-time equivalent (in thousands): Healthcare $ 576 $ 614 Education $ 564 $ 572 Business Advisory $ 464 $ 453 Total $ 566 $ 596  

______________________

(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 full-time professionals who provide consulting services and generate revenues based on the number of hours worked.   (3) Utilization rate for full-time billable consultants is calculated by dividing the number of hours all 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 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) Consists of cultural transformation consultants within the Studer Group solution, which include coaches and their support staff, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients.   N/M- Not Meaningful           HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS

TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)

(In thousands) (Unaudited)   Three Months Ended Twelve Months Ended December 31, December 31, 2017   2016 2017   2016 Revenues $ 185,927   $ 178,124   $ 732,570   $ 726,272   Net income (loss) from continuing operations $ (29,310 ) $ 4,187 $ (170,505 ) $ 39,480 Add back: Income tax expense (benefit) (2,259 ) 179 (51,999 ) 19,677 Interest expense, net of interest income 4,802 4,004 18,613 16,274 Depreciation and amortization 12,208   12,297   49,145   46,639   Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) (6) (14,559 ) 20,667 (154,746 ) 122,070 Add back: Restructuring charges 951 5,463 6,246 9,592 Other losses (gains), net 1,333 (2,484 ) 1,111 (1,990 ) Goodwill impairment charges 43,493 — 253,093 — Other non-operating expense (income) 235 — (696 ) — Foreign currency transaction losses (gains), net 15   259   (434 ) (11 ) Adjusted EBITDA (6) $ 31,468   $ 23,905   $ 104,574   $ 129,661   Adjusted EBITDA as a percentage of revenues (6) 16.9 % 13.4 % 14.3 % 17.9 %           HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS

TO ADJUSTED NET INCOME (LOSS) FROM CONTINUING OPERATIONS (6)

(In thousands, except per share amounts) (Unaudited)   Three Months Ended Twelve Months Ended December 31, December 31, 2017   2016 2017   2016 Net income (loss) from continuing operations $ (29,310 ) $ 4,187   $ (170,505 ) $ 39,480   Weighted average shares – diluted 21,515 21,473 21,439 21,424 Diluted earnings (loss) per share from continuing operations $ (1.36 ) $ 0.19   $ (7.95 ) $ 1.84   Add back: Amortization of intangible assets 8,595 8,739 35,027 33,108 Restructuring charges 951 5,463 6,246 9,592 Other losses (gains), net 1,333 (2,484 ) 1,111 (1,990 ) Goodwill impairment charges 43,493 — 253,093 — Non-cash interest on convertible notes 1,998 1,906 7,851 7,488 Other non-operating expense (income) 235 — (696 ) — Tax effect

(21,195

) (5,354 )

(91,557

) (18,942 ) Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017

8,762

—

8,762

— Tax benefit related to "check-the-box" election 20   —   (2,728 ) —   Total adjustments, net of tax

44,192

  8,270  

217,109

  29,256   Adjusted net income from continuing operations (6) $

14,882

  $ 12,457   $

46,604

  $ 68,736   Adjusted weighted average shares - diluted (7) 21,738 21,473 21,627 21,424 Adjusted diluted earnings per share from continuing operations (6) $

0.68

  $ 0.58   $

2.15

  $ 3.21    

______________________

(6)     In evaluating the company’s financial performance and outlook, management uses earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income (loss) from continuing operations, and adjusted diluted earnings (loss) per share from continuing operations, which are non-GAAP measures. Management uses these non-GAAP financial measures to gain an understanding of the company's comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect the company's ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing the company's business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. Management believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States.  

(7)

As the company reported a net loss for the three and twelve months ended December 31, 2017, GAAP diluted weighted average shares outstanding equals the basic weighted average shares outstanding for that period. The non-GAAP adjustments described above resulted in adjusted net income from continuing operations for those periods. Therefore, dilutive common stock equivalents have been included in the calculation of adjusted diluted weighted average shares outstanding.       HURON CONSULTING GROUP INC. RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2018 OUTLOOK   RECONCILIATION OF NET INCOME

TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (8)

(In millions) (Unaudited)   Year Ending December 31, 2018 Guidance Range Low     High Projected revenues - GAAP $ 720.0   $ 760.0   Projected net income - GAAP $ 23.0 $ 29.5 Add back: Income tax expense 9.0 13.5 Interest expense, net of interest income 18.5 19.0 Depreciation and amortization 36.0   36.5   Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (8) 86.5   98.5   Projected adjusted EBITDA (8) $ 86.5   $ 98.5   Projected adjusted EBITDA as a percentage of projected revenues (8) 12.0 % 13.0 %     RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME ((8)) (In millions, except per share amounts) (Unaudited)     Year Ending December 31, 2018 Guidance Range Low     High Projected net income - GAAP $ 23.0   $ 29.5   Projected diluted earnings per share - GAAP $ 1.05   $ 1.35   Add back: Amortization of intangible assets 24.0 24.0 Non-cash interest on convertible notes 8.0 8.0 Tax effect (8.0 ) (8.0 ) Total adjustments, net of tax 24.0   24.0   Projected adjusted net income (8) $ 47.0   $ 53.5   Projected adjusted diluted earnings per share (8) $ 2.10   $ 2.40    

______________________

(8)     In evaluating the company’s outlook, management uses projected EBITDA, projected adjusted EBITDA, projected adjusted EBITDA as a percentage of revenues, projected adjusted net income, and projected adjusted diluted earnings per share, which are non-GAAP measures. Management believes that the use of such measures, as supplements to projected net loss and projected diluted loss per share, and other GAAP measures, are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of the company’s core operating results and future prospects without the effect of non-cash or other one-time items. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States.

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HuronMEDIA CONTACTSarah McHugh, 312-880-2624smchugh@huronconsultinggroup.comorINVESTOR CONTACTJohn D. Kelly, 312-583-8722investor@huronconsultinggroup.com