EXHIBIT 99.2
 
HURON CONSULTING GROUP INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION


The following unaudited pro forma financial information reflects the estimated effect of the acquisition of MSGalt & Company, LLC (“Galt”) by Huron Consulting Group Inc. (the “Company”).

The pro forma consolidated statement of income for the year ended December 31, 2005 combine the respective statements of the Company and Galt as if the acquisition was consummated at the beginning of the periods presented. The pro forma consolidated balance sheet as of December 31, 2005 combines the respective balance sheets of the Company and Galt as if the acquisition was consummated as of the balance sheet date.

These unaudited pro forma consolidated statement of income and balance sheet are based on the assumptions and adjustments as described in the accompanying notes and are based upon the purchase method of accounting. These pro forma statements do no reflect the potential impact of contingent payments that could be made to the members of Galt. The Company is in the process of obtaining a third-party valuation of certain intangible assets; thus, the allocation of the purchase price is subject to refinement. The unaudited pro forma financial information should be read in conjunction with Galt’s audited financial statements and notes thereto for the years ended December 31, 2004 and 2005, which are filed as Exhibit 99.1 to this current report on Form 8-K, as well as the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2004 and 2005 included in the Company’s annual report on Form 10-K.

The unaudited pro forma consolidated financial information is not necessarily indicative of what actually would have occurred if the acquisition had been effective for the periods presented and should not be taken as representative of our future consolidated results of operations or financial position.
 
 
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Huron Consulting Group Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2005
(In thousands, except per share amounts)
 
 
   
Company
 
Galt
 
Pro Forma
Adjustments
 
Note
 
Pro Forma
Consolidated
 
Assets
                               
Current assets:
                               
Cash and cash equivalents
 
$
31,820
 
$
4,768
 
$
(13,887
)
 
1
 
$
17,933
 
                 
(4,768
)
 
3
       
Receivables from clients, net
   
29,164
   
2,798
   
(2,798
)
 
3
   
29,164
 
Unbilled services, net 
   
18,187
   
2,180
   
(2,180
)
 
3
   
18,187
 
Income tax receivable
   
232
   
¾
   
¾
         
232
 
Deferred income taxes
   
12,553
   
¾
   
¾
         
12,553
 
Other current assets
   
5,799
   
36
   
(36
)
 
3
   
5,799
 
Total current assets
   
97,755
   
9,782
   
(23,669
)
       
83,868
 
Property and equipment, net 
   
13,162
   
12
   
¾
         
13,174
 
Deferred income taxes 
   
2,154
   
¾
   
¾
         
2,154
 
Deposits 
   
1,147
   
¾
   
¾
         
1,147
 
Intangible assets, net 
   
844
   
¾
   
4,600
   
2
   
5,444
 
Goodwill 
   
14,637
   
¾
   
15,775
   
2
   
30,412
 
Total assets 
 
$
129,699
 
$
9,794
 
$
(3,294
)
     
$
139,199
 
                                 
Liabilities and stockholders’/ members’ equity
                               
Current liabilities:
                               
Accounts payable
 
$
2,671
 
$
153
 
$
(153
)
 
3
 
$
2,671
 
Accrued expenses
   
4,357
   
¾
   
¾
         
4,357
 
Accrued payroll and related benefits
   
32,073
   
¾
   
¾
         
32,073
 
Income tax payable
   
491
   
¾
   
¾
         
491
 
Deferred revenues
   
4,609
   
¾
   
¾
         
4,609
 
Current portion of borrowings and capital lease obligations 
   
1,282
   
¾
   
6,500
   
1
   
7,782
 
Total current liabilities
   
45,483
   
153
   
6,347
         
51,983
 
Non-current liabilities:
                               
Accrued expenses
   
274
   
¾
   
¾
         
274
 
Borrowings and capital lease obligations, net of current portion 
   
2,127
   
¾
   
¾
         
2,127
 
Deferred lease incentives
   
6,283
   
¾
   
¾
         
6,283
 
Total non-current liabilities
   
8,684
   
¾
   
¾
         
8,684
 
Stockholders’ / members’ equity 
   
75,532
   
9,641
   
(9,641
)
 
3
   
75,532
 
Total liabilities and stockholders’ equity 
 
$
129,699
 
$
9,794
 
$
(3,294
)
     
$
136,199
 

 
See accompanying notes.
 
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Huron Consulting Group Inc.
Unaudited Pro Forma Consolidated Statement of Income
For The Year Ended December 31, 2005
(In thousands, except per share amounts)
 
 
   
Company
 
Galt
 
Pro Forma Adjustments
 
Note
 
Pro Forma Consolidated
 
Revenues and reimbursable expenses:
                               
Revenues 
 
$
207,213
 
$
16,779
 
$
(657
)
 
4
 
$
223,335
 
Reimbursable expenses 
   
18,749
   
2,426
   
(178
)
 
4
   
20,997
 
Total revenues and reimbursable expenses
   
225,962
   
19,205
   
(835
)
       
244,332
 
Direct costs and reimbursable expenses (exclusive of depreciation and amortization
shown in operating expenses):
                               
Direct costs 
   
117,768
   
7,812
   
(657
)
 
4
   
125,669
 
                 
746
   
5
       
Intangible assets amortization 
   
1,314
   
¾
   
1,800
   
6
   
3,114
 
Reimbursable expenses 
   
18,982
   
2,425
   
(178
)
 
4
   
21,229
 
Total direct costs and reimbursable expenses
   
138,064
   
10,237
   
1,711
         
150,012
 
Operating expenses:
                               
Selling, general and administrative 
   
51,035
   
283
   
¾
         
51,318
 
Depreciation and amortization 
   
5,282
   
2
   
1,760
   
6
   
7,044
 
Total operating expenses
   
56,317
   
285
   
1,760
         
58,362
 
Operating income 
   
31,581
   
8,683
   
(4,306
)
       
35,958
 
Other income (expense) 
   
435
   
30
   
(884
)
 
7
   
(419
)
Income before provision for income taxes 
   
32,016
   
8,713
   
(5,190
)
       
35,539
 
Provision (benefit) for income taxes 
   
14,247
   
¾
   
(2,087
)
 
8
   
15,663
 
                 
3,503
   
9
       
Net income 
 
$
17,769
 
$
8,713
 
$
(6,606
)
     
$
19,876
 
                                 
Earnings per share:
                               
Basic 
 
$
1.13
                   
$
1.26
 
Diluted 
 
$
1.05
                   
$
1.18
 
                                 
Weighted average shares used in calculating earnings per share:
                               
Basic 
   
15,741
                     
15,741
 
Diluted 
   
16,858
                     
16,858
 

 
See accompanying notes.
 
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Huron Consulting Group Inc.
Notes to Unaudited Pro Forma Financial Information

 
(1)    This adjustment is to record the funding of the acquisition, which consisted of the following (in thousands):
 
Cash paid at closing
 
$
13,887
 
Borrowings
   
6,500
 
Total purchase price
 
$
20,387
 

The Company borrowed $6.5 million under its bank credit agreement, which expires on July 10, 2006. Borrowings under the agreement bear interest at LIBOR plus 1.25%.
 
(2)    The purchase price was allocated, based on a preliminary valuation, as follows (in thousands):
 
Net assets purchased
 
$
12
 
Customer contracts
   
1,800
 
Customer relationships
   
1,500
 
Non-competition agreements
   
1,300
 
Goodwill
   
15,775
 
Total purchase price
 
$
20,387
 
 
(3)    This adjustment is to eliminate the assets and liabilities that the Company did not purchase or assume.
 
(4)    This adjustment is to eliminate intercompany revenues and expenses.
 
(5)    This adjustment is to record contractual obligations pursuant to employment agreements entered into between the Company and certain Galt employees in connection with the acquisition.
 
(6)    This adjustment is to record estimated amortization expense for identifiable intangible assets, which includes customer contracts, customer relationships and non-competition  agreements as presented above.
 
(7)    This adjustment is to record interest expense relating to borrowings of $6.5 million on the acquisition date and the interest income foregone relating to the cash outlay. The $6.5 million of borrowings bear interest at LIBOR plus 1.25%, which was 6.08% as of the acquisition date. A variance of 0.125% in the interest rate would have a $4,000 effect on pro forma net income.
 
(8)    This adjustment is to record the tax benefit relating to contractual obligations under the employment agreements, intangible assets amortization, and interest expense.
 
(9)    This adjustment is to record an income tax provision as if Galt had filed its income tax returns on a consolidated basis with the Company.
 
 
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